let out property meaningSingapore tax rateself occupied中文Singapore corporate income taxself-occupied propertySingapore tax 2020Singapore income tax CalculatorSingapore tax rate 2019Singapore tax rate 2020Singapore corporate tax rate 2020Income Tax Singapore hotlineIncome tax ActLoss set offself-occupied property中文IRASSelf Occupied Property (SOP) & Tax implications - ReLakhs.com
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What is Self Occupied property? Two Self Occupied Houses Tax Implications of HRA, Home Loan Interest / Principal,multiple homes, partly / portion let out. SkiptoprimarynavigationSkiptomaincontentSkiptoprimarysidebarYouarehere:Home/TaxPlanning/SelfOccupiedProperty(SOP)&Taximplications Weoftengettohearatermcalledas‘SelfoccupiedProperty(House).’Thiscomesintopicture,whenwetalkabout,HouseRentAllowance(or)whilecalculatingtheIncomefromHouseproperty(or)whileclaimingthetaxdeductiononhomeloaninterestamount. So,whatisaSelfoccupiedproperty intermsofIncomeTax? DefinitionofaSelfoccupiedproperty(SOP) Aselfoccupiedpropertyisonewhichisownedandusedbyyouforyourownresidentialpurpose.Youhavetooccupythepropertythroughouttheyear.Thus,apropertyorahousenotoccupiedbytheownerforhis/herresidencecannotbetreatedasaself-occupiedproperty. Thereisanexceptiontotheaboverule.Ifthefollowingconditionsaresatisfiedthenthepropertycanbetreatedasself-occupiedandtheannualvalueofaproperty(consideredwhilecalculating‘IncomefromHouseProperty’)willbeNIL. Ifyou(taxpayer)ownaproperty; Ifsuchpropertycannotbeoccupiedbyyou,byreasonofthefactthatowingtoyouremployment,businessorprofessioncarriedonatanyotherplace(otherthantheplacewhereyourselfoccupiedpropertyisthere),youhavetoresideatotherplaceinabuildingnotownedbyyou; Ifthepropertymentionedin(a)aboveisnotlet-outatanytimeduringtheyear.(Thepropertyshouldnotbelet-outfullyorpartthereof); Nootherbenefitderivedfromsuchproperty. (TheGrossAnnualValue(GAV),alsocalledjusttheAnnualValue,ofapropertyisusedincalculatingthetaxorrentwhichshouldbeappliedtotheproperty). LetusnowunderstandfewmorepointsonSelf-occupiedproperty,like– WhatifIhaveoneormoreself-occupiedproperties?WhichoneshouldIchooseasself-occupiedproperty? IsmyHRAfullytaxableifIhaveaself-occupiedproperty? HowmuchcanIclaimasIncometaxdeductionunderSection24b,ontheInterestamountpaidformyhomeloan? Ifmyself-occupiedpropertyispartlyLet-out,whatarethetaximplications?CanIconsideritasbothlet-outaswellasSOPforclaimingtaxdeductions? Myself-occupiedpropertyisjointlyowned(co-owned)thenwhatarethetaximplications? (Clickontheaboveimagetoopenitinanewbrowserwindow.) DoyouownoneormoreSelfoccupiedproperties? Youmayhaveaquerylikethisone–‘IownahouseinBangaloreandplantopurchaseanotherone.Fromincometaxperspective,howmanyhousescanbetreatedasselfoccupied?‘ Answeris,onlyoneresidentialpropertycanbeclaimedasselfoccupied.EvenIfyouoccupy(ormaybeyourparents)morethanonepropertyforyourresidentialpurpose,onlyonehouseistreatedasSelfOccupiedProperty.WhichonetochooseasSOP?Itislefttoyourdiscretion.Theother(s)aretreatedas“Deemedtobeletout”(DLOP)properties. Latestupdate(02-Feb-2019):Budget2019– Currently,incometaxonnotionalrent(ondeemedtobeletoutproperty)ispayableifonehasmorethanoneself-occupiedhouse.Notaxonnotionalrenton SecondSelf-occupiedhouse hasbeenproposed.So,youcannowhold2Self-occupiedpropertiesanddon’thavetoshowtherentalincomefromsecondSoPasnotionalrent.ThisiswitheffectivefromFY2019-20/AY2020-21. YoumaykindlygothroughthisinterestingETarticle@‘Itwon’tbeeasytoclaim2housepropertiesasself-occupiedfortaxpurposes‘. Youalsoneedtoknowthatyoumayalsohavetopaywealthtaxonthesecondhouseasonlyoneresidentialpropertyisexemptedfromit.However,ifyougiveyoursecondhouseonrentformorethan300daysinayear,itwillnotbesubjecttowealthtax. Selfoccupiedhousepropertyforbusinesspurpose? IfyouuseyourSOPhouseforcarryingonyourbusiness/professionthenincomefromsuchpropertyisnotchargeabletotaxunderthehead“IncomefromHouseproperty.”(ThisiscoveredundertheheadProfits&GainsofBusiness&Profession). SelfOccupiedProperty&HRA(HouseRentAllowance) Ifyouliveinyourownhouse,theHRAgivenbyyourcompanyisfullytaxable.Inthiscase,youarenotentitledforHRAandtheentireHRAamountistaxable.Therearefewexceptionstothis,asbelow. Whatifyouownahouseandyouareemployedinadifferentplace/city?Inthiscase,youcanclaimHRAexemption. Youmayoccupyarentedhouseandyoumayalsohaveaownpropertyinthesamecity/town.Then,inthiscase,areyouentitledforHRAexemption?Isittaxable?Firstthingis,yourself-occupiedpropertywillbetreatedasa‘let-out’property(evenifitisleftvacant).Secondly,youareentitledtoreceiveHRAanditisnottaxable.But,dorememberthatthisisatrickysituation.Yourreasonsforstayinginarentedhouseshouldbereasonableandjustifiable(duringtaxscrutiny,ifany). Anotherscenariocanbe–youstayinarentedpropertyinadifferentcity(duetoyouremployment/businessrequirements)andyourfamily(parents)stayinyourownselfoccupiedproperty.Underthisscenario,youcandefinitelyclaimHRAexemption.YourownhouseistreatedasSOPandannualvalueistreatedasNIL.Evenifyourownpropertyiskeptvacant,itisstilltreatedasSOPonly. SelfOccupiedHouse/Property–HomeLoan–IncomeTaxBenefits IfyouhavetakenaloantopurchaseyourSelfoccupiedproperty,youareeligibleforfewincometaxbenefits/taxdeductionsunderoldtaxregime(only)forFY2020-21. TheInterestpayableonhomeloanofa‘self–occupied‘property‘canbeclaimedastaxdeduction.UnderSection24(b)ofTheIncomeTaxAct.TaxDeductiononhomeloan interestforaself–occupiedpropertyisuptoRs2lakh. UnderSection80C–DeductiononrepaymentofprincipalamountonhomeloanisuptoRs1.5lakh. Toacquireselfoccupiedproperty,Ifyougoforajointhomeloanalongwithyourspouseintheratiooflet’ssay50:50,thenbothofyoucanclaimthesebenefitsseparately.SothecombinedlimitwillbeRs3lakh(principalcomponent)underSection80Cand4lakh(Interestcomponent)underSection24. AnadditionalincometaxdeductionofuptoRs.1.5lakhforinterestpaidonhomeloansborrowedduring01-04-2019to31-3-2020hasbeenproposedinBudget2019-20.ThiswillbeavailableunderNewSection80EEA.ThattakesthetotaldeductiontouptoRs3.5lakhs(existingRs2lakhlimit+Rs1.5lakhnewproposal).ThisnewTaxdeductionisapplicableonloantakentobuyaaself-occupied‘affordablehousingproperty’only.PropertiescostinguptoRs45lakhareconsideredasaffordable. (Ifyoutakehomeloanforrepair/renovation/reconstructionofyourselfoccupiedhouse,thenthemaximumTaxdeductionlimitonaccountofinterestisRs30,000only) SelfOccupiedProperty–AportionofitisSelf-occupied&anotherportionisLet-out:Taximplications Thisscenariocanbelikethis–Youhaveboughtatwo-storey(floors)buildingthroughahomeloan.Youhaveoccupiedonefloorandrentedouttheotheronethroughouttheyear.Inthiscase,incomeofeachportionhastobecomputedseparately,asifthelet-outportionwereLet-outpropertyandtheSelf-occupiedportionwereSOP. Howtoclaimhousingloaninterestonthispartlyletoutproperty?Thehomeloaninterestamountcanbeapportioned(shared)betweenthelet-outportionandSOP. ForExample:MrKejriwalownsaDuplexFlatinNewDelhi,whichhastwofloorswithseparateentryforeachfloor.Hehasgivenoneflooronrentandanotheroneisself-occupiedbyhim.HishousingloaninterestamountisRs5LakhinaFinancialYear.Canheclaiminterestamountforlet-outandself-occupiedportionsseparately? Theansweris,YES.Thepropertyistreatedas50%let-outand50%asSOP.Thetotalinterestamounthastobedividedequallyi.e.,Rs2.5Lakhperportion. Themaximuminterestamountthathecanclaimu/s24(b)forselfoccupiedproperty&Let-outportionisRs2Lakhonly.So,outofRs2.5Lakh,hecanonlyclaimRs2Lakhastaxdeduction. Thereisnomaximumceilinglimit(oninterestamount)forLet-outportion.So,HecangoaheadandclaimtheentireRs2.5Lakhastaxdeduction. (Kindlynotethattheapportionmentoftheinterestamountcanbedonebasedonplintharea(or)built-upfloorarea(or)anyotherreasonablebasis). SelfOccupiedProperty–PartlyLetout&PartlySelfoccupied(Time-basis) Ifyourpropertyisself-occupiedforpartoftheyear&let-outforremainingpartoftheyear,thentheincomefromyourHousepropertyshallbecalculatedforthewholeyearas‘DeemedLet-outProperty’only.Therewon’tbeanyceilinglimittoOnecanclaimtaxdeductionon“paymentofinterestamount”ofuptoRs2lakhonhomeloan.IbelievethatitisnottreatedasSelfOccupiedProperty. HowtocalculateIncome fromHouseproperty? Firstly,wehavetodeterminetheGrossAnnualValue.Thegrossannualvalueofuptotwoself-occupiedpropertiesiszero.WhereasincaseofLetouthouse,itistherentcollected. GROSSANNUALVALUEOFTHEPROPERTY Less: MunicipalTaxespaidbyowner =NetAnnualValue (GrossAnnualValue–PropertyTax) Less:30%standarddeductiononNAV(underSection24(a)oftheIncomeTaxAct) Less: Interestonhomeloan(allowedunderSection24(b)) Less:Interestonhomeloan (allowedunderSection80EE)(ifeligible) =Incomefromhouseproperty Latestnews:Budget2016-17–HomeLoanTaxBenefits&SelfOccupiedProperty: Existingrule:ToclaimtaxbenefitsonhomeloanofaSelf-occupiedProperty,theconstructionhastobecompletedwithin3yearsfromtheendoftheFinancialYearinwhichthecapital(homeloan)borrowed. NewProvision(effectiveAY2017-18): Inviewofthefactthathousingprojectsoftentakelongertimeforcompletion,itisproposedthatclause(b)ofsection24beamendedtoprovidethattheDeductionunderthesaidprovisiononaccountofInterestpaidonHomeLoanforacquisitionorconstructionofaself-occupiedhousepropertyshallbeavailableiftheacquisitionorconstructioniscompletedwithinFIVEyearsfromtheendofthefinancialyearinwhichcapitalwasborrowed. Thisamendmentwilltakeeffectfrom1stdayofApril,2017andwill,accordinglyapplyinrelationtoassessmentyear2017-2018andsubsequentyears. Doyoufindthispostinformative?Kindlyshareyourcomments🙂 Continuereading: ChecklistofImportantPropertyDocumentsinIndia|LegalChecklistforPropertyPurchase WhatisMutationofProperty?HowtoapplyforMutationofProperty? UnderstandingTaxImplicationsofIncomefromHouse/Property 5waysoftransferringyourImmovable(or)RealEstateProperty Budget2019–Rs1.5lakhAdditionalIncomeTaxdeductiononaffordablehomeloans|Section80EE (ImagecourtesyofiosphereatFreeDigitalPhotos.net) SreekanthReddy: SreekanthistheManbehindReLakhs.com.HeisanIndependentCertifiedFinancialPlanner(CFP),engagedinblogging&propertyconsultancyforthelast11yearsthroughhisfirmReLakhsFinancialServices.HeisnotassociatedwithanyFinancialproduct/serviceprovider. Themainaimofhisblogisto"helpinvestorstakeinformedfinancialdecisions." "PleasenotethattheviewsgiveninthisBlog/CommentsSection/Forumareclarificationsmeantforreferenceandguidanceofthereaderstoexplorefurtheronthetopics/queriesraisedandtakeinformeddecisions.Theseshouldnotbeconstruedasinvestmentadviceorlegalopinion." ConnectwithAuthor: FacebookTwitterLinkedIn Meandmyhusbandhaveajointloan.Wedon’tstayinthathouse.Itisrentedout.Insamecitywestayinanotherareainarentedhouse.MyhusbandclaimstheHRAwhereasidon’t.Healsotakestherentfromownedpropertyandidon’t.Ialsodon’tpaytherentofthecurrenthouse.IwanttotakethebenefitofHouseLoanhowshouldidoitasalet-outpropertyorself-occupiedproperty Dearshweta, Isthehousejointlyownedbybothofyou?? yes.bothloanaswellashouseisjointlyownedbyus Dearshweta, ThenadvisabletoshowyourshareofrentalincomefromthepropertyandcanalsoclaimtaxbenefitonEMIpayments. Relatedarticles: *UnderstandingTaxImplicationsofIncomefromHouse/Property *JointHomeLoan:Eligibilityrules&IncomeTaxBenefits *IncomeTaxDeductionsListFY2020-21|NewVsOldTaxRegimeAY2021-22 butidonottakeanybenefitoftherentalincome.itjustcomplicatesthatwebothtakeHRAbenefitbypayingrent50-50,thentakerent50-50andclaimhousebenefitalso50-50 Dearshweta, That’showthelawhasbeenframed..onecantaketheapplicabletaxbenefitsaspertheownershipshare.. IhavetwoflatsinKolkata, a)inthefirstoneIstay,whereas b)thesecondoneislyingvacant,occasionallyIvisitthereandisunderHomeLoan. WhatwouldbetheincometaximplicationforthesecondoneinAY2020-21 DearDrAbhijit, Thegrossannualvalueofuptotwoself-occupiedpropertiesiszero. Doyouoccupythesecondoneaswell?Orareyouplanningtogiveitonrent? NoIhavenoplantogiveitonrentrightnowitislyingvacant.OccasionallyIgoandstayforfewhours.DoIhavetoshowdeemedrent? DearAbhijit, Ibelievethatyoumayhavetoshowitas‘deemedtobelet-out’one.. HiSreekanth, MyhusbandisabouttobuyaflatinPunecityonhisownname,hecuurentlylivesinMumbai; Iamcuurentlyworkinginpune&livinginpune. Asiamnotco-owningthisproperty&ifiliveinhisnewflatwillibeabletoclaimHRA? DearKranti, Yes,youcanclaim. AtaxpayerisentitledtoclaimtheHRAexemptionforrentpaidtohisorherspouseprovidedthereisdocumentationtoprovethatthearrangementisgenuine. Claimingexemptionforthehouserentallowance(HRA)bypayingrenttothespousehasbeenacontentiousissue(canbesubjecttoscrutiny). KindlygetRentalagreementdoneandpayinnon-cashmode. Iftherentis>Rs8,333pmyouneedtoquoteyourspouse’sPANnumber. Also,yourhusbandhastoshowthisasrentalincomeinhisITRfiling. Relatedarticlelink.. Taxpayingparentdoesnotownhouse,staysinson’shousewithoutpayingrent.WhatshouldhefillinhousepropertysectionofITR1ofAY2019-20asthepropertyisneitherownednorrented. DearPrasad, Dotheybothliveinsamecity/location?IsthesonclaimingHRA? Hi.IownapropertyinGurgaon.IamnowshiftingtoabiggerpropertyinGurgaon(1kmaway)onrent.Thefirstpropertywillbeusedbymyparents(norentalincome). 1.CanIclaimHRAonmynewrentedproperty?(despitesamecitynature) 2.WillIhavetopaytaxondeemednotionalrentalincomeforfirstproperty? thanks Hi, 1–Yes. 2–YoucanconsideritasaSelf-occupiedproperty. Mysonanddaughterinlawpurchasedaflaton26thJuly2018.TheyarestayingwithparentsinanotherhousepayingarentofRs.16000/-tohisfather.Newlypurchasedhomeisvacant.Nowheplantoshiftinfebruary2018CanheclaimedHRAexemptionuptoMarch19 DearAleykuttyji, Yes,hecanclaim.. Relatedarticle:IncomeTaxDeductionsListFY2018-19|ListofimportantIncomeTaxExemptionsforAY2019-20 Dearsir,Ipurchasedahousein2007withhomeloan,afterwardsihaveforcedclosedtheloanandmybrotherstaysinthathouse.Nowihavepurchasedahousein2018withhomeloananditisalsooccupiedbyme.Sohowtocalculatethetaxliability? DearSK, Youcandeclarethehouseoccupiedbyyourbrotheras‘Let-out’propertyandthenoneoccupiedbyyouas‘Self-occupied’. Youcanshowtherentalincomefromlet-outpropertyinyourincometaxreturn. CanclaimtaxbenefitofuptoRs2lakhu/s24towardstheinterestamtpaidforself-occupiedproperty. Kindlyread: *UnderstandingTaxImplicationsofIncomefromHouse/Property *IncomeTaxDeductionsListFY2018-19|ListofimportantIncomeTaxExemptionsforAY2019-20 DearSreekanth, Thanksyouforsomanyclarifications,howeverIhaveaslightlydifferentcase,IamlivinginSOPon3rdfloor,andmymotherhaskneecomplications,soforherIhadtotakearentedapartmentonthegroundfloorofanotherbuildingnearby. Mymotherisfullydependentonme,TherentagreementofthisrentedflatisonmynameandIampayingrentforit. Soinsuchacase,canIclaimHRAexemption. requesttokindlyguideplease. DearSanjay, Asyouarelivinginyourownhouse(SOP),IbelievethatyoucannotclaimHRAinthisscenario,thoughyouarepayingtherentonbehalfofyourparents. Yes,IamstayinginmyOwnhouse, Thanksalotfortheclarification DearSreekanth, Ihaveahousepropertyinacityandigaveitforrent.Ihaven’ttakenhomeloanformyhouse.Myofficeisfarfrommyhouse,soIliveinthesamecityinarentedhouse.IamclaimingHRAfortherentedhouse.ButthetaxbenefitigetfromHRAisminimalcomparedtotherentreceivedfrommyhouseproperty.CanishowmyhouseasselfoccupiedinsteadofclaimingHRAformyrentedhouse?Thanksforyourhelp. DearKavitha, IsyourTenantclaimingRentashis/herHRA? No,mytenantsarenotclaimingHRA.Itisasinglebuildingwith3houses(3floor)init.ButnooneisclaimingHRA. Thanksforyourreply. DearKavitha, Insuchascenario,youmayclaimtaxbenefitbutyoumayhavetoupdateyouremployeerecordsinyourCompanyaccordinglyandshouldnotshowrentalincomeinyourITR. But,itsalwaysadvisabletobehonest! ThankyouSreekanth.Onelastquestion. CanIshowmyhouse(abovesaid)asselfoccupiedandstopclaimingtaxbenefitforHRA? IhaveaflatinGreaterNoidaUPwhichisvacant. IamlivingonrentatDwarkaNewDelhi. IamworkinginPSUandgettingHRA. CanIclaimrebateonrentpaidforincometaxpurpose Dearmano..Yes,youcanclaimHRA. Relatedarticles: *UnderstandingTaxImplicationsofIncomefromHouse/Property *IncomeTaxDeductionsListFY2018-19|ListofimportantIncomeTaxExemptionsforAY2019-20 DearSreekanth, I’vetwohomeloans.Oneforself-occupiedandanotheroneforlet-outproperty.Homeloaninterestpaidtowardsself–occupiedpropertyisRs.2,42,238/-andhomeloaninterestpaidtowardslet-outpropertyisRs.2,39,096/-.I’mawarethatnowthemax.limitineachofthesecaseonecanclaimisRs.2,00,000/- Inmycase,canIgettaxexemptionfor2,00,000+2,00,000=4lakhsorforboththepropertiesIcangetexemptionofonly2lakhs? DearPradeep, YoucanclaimuptoRs2Lakhonly(forbothhousesputtogether). Kindlygothroughbelowarticles; *UnderstandingTaxImplicationsofIncomefromHouse/Property *IncomeTaxDeductionsListFY2018-19|ListofimportantIncomeTaxExemptionsforAY2019-20 DearSreekanth Ihavepaidtwoinstalmentsofmyhouseloaninthemonthoffeb&mar18.Ihaveresidedinarentedhouse.CanIclaimHRAfor10mthsand2mthsinselfoccupiedproper DearTanmoy..Yes,youcanclaimbothfortherespectiveperiods. Relatedarticles: *UnderstandingTaxImplicationsofIncomefromHouse/Property *IncomeTaxDeductionsListFY2018-19|ListofimportantIncomeTaxExemptionsforAY2019-20 IamagovernmentservantlivinginownhouseandnotclaiminganyHRAexemption.CanIclaimpropertytaxpaidtoMunicipalauthorityinmyincometaxreturn Dearsunilkumar, Yes,youcanclaimitunderthehead‘incomefromhouseproperty’. Kindlyread:UnderstandingTaxImplicationsofIncomefromHouse/Property sir,Ihavingahouseselfoccupiedandownedjointlybymeandmyhusband.WhetherihavetoshowthedetailsofannualvalueetcintheITRforAY2018-19.Noportionisletoutorwearegettinganyincomefromthepropertyandwearepayingthepropertytaxpromtly.whetherbothcansimplydeclareitasSOPinITR.Areplyissolicited. withregards parvathi Dearparvathi, TherentalannualvalueisNILincaseofSelfoccupiedproperty. Ifyouhavetakenahomeloanthenyoucanclaimtaxbenefitsonit. Kindlyread:UnderstandingTaxImplicationsofIncomefromHouse/Property Ihaveahousingloanwithanationalisedbank.IhadrepaidsumofRs.4.21lacsinthemonthofJuly16andthereafternorepaymenthasbeenmade. Thebankissuesmecertificateofloanrepaymentfor4.21lacswithPrincipalrepaymentof373000/-lacsandRs.48000towardsintereststatingthattheinterestrepaymentisconsidereduptoJune16asinterestrepaymentforfurtherperiodisnotdone.howevermyloanaccountshowsdebitinterestfromJulytillMarch17whichisstatedtobeunpaidasnorepaymenthasbeendoneafterJuly16 IsthebankrightinissuingsuchcertificateoramIeligiblefortheentirerebateofinterestchargedtomyloanaccountduringthefinancialyear2016-17 Pleaseguide DearVASANT..YoucanclaimentireinterestpaymentdoneinFY2016-17(subjecttoceilinglimitofuptoRs2LakhifitisSop). Kindlyread:ITdeductionslistforFY2017-18. HiSreekanth, Ihave1SOPinHYDandotheronegettingreadyinBLR(worklocation), 1.inHYDJointlyownedbymeandmydad,thoughiampayingthecompleteEMI(HDFC),sofariamclaimingthecompleteTAXbenefit.Myparentsarestayinghere,soSOP 2.BLRoneyettogetreadyandregistrationispending(anothermonth),willbestayingthere.ThisoneisloanedfromSBI(self)andiampayingapreEMIsofarwithoutanybenefit.ThiswillbeconvertedsoontoactualEMIonceprocesstowardsregistrationandwillbeSOP. SofariunderstandthatonlyonepropertycanbeclaimedasSOPandotherwillbeLOP/DLOP. IamconfusedonwhichonetodeclareSOPandwhichoneDLOP.HowcanigetmostofTAXbenefitoutofthese.MyHYDhouseloanisverylesscomparedtoBLRhouse. Havefewquestions 1.ShouldideclaremyBLRhouseasSOPonceoccupiedordeclareitnow,anywaysiwillbemovingnextmonth.Asthisonehasgreaterloanamount. 2.Whichpartofloan(int/principal)caniclaimformyHYDhouse.underwhichsection 3.Howcaniclaimmypre-EMIamount.iheardicanspreadtheinterestpaidsofarinto5yearsafteroccupation.butunderwhatsection. Regards, Mohan DearMohan, KindlynotethatfromFY2017-18,themaximumlossonincomefromhouseproperty(properties)isuptoRs2Lakhonly. So,ifyouarepayinginterestpaymentsofmorethanRs2Lakhthenitdoesnotmakeanydifferenceasofnow.ButanywaysyoucanclaimthepropertywhichhashigherloanamountasLetoutoneandclaimtheotheroneasSoP.(Taxlawsmaychangeanytime🙂) Kindlyread: Incomeformhouseproperty&taximplications. ITdeductionslistforFY2017-18. Underconstructionproperty&taximplications. Thanksforthereply,willgothroughthearticles DEARSIR MAYIKNOW..IAMADOCTORHAVINGLEGALOPDCLINICBUSINESS(PARTIALAREA)INRESIDENTIALFLATANDATTHESAMETIMEIHAVEHOMELOANONFLAT.CANICLAIMDEPRECIATIONFORTHEPARTUSEDASOPDCLINIC DR.KIRTIKUMARPILANKAR DearKIRTIKUMAR..KindlyconsultaCA. HiShreekanth, BeforeIpostmyQuery,AGreatthanksforhelpingusoutwithyourvaluablesuggestions. IcurrentlystayinGreaterNoida(DelhiNCR)andpossessaFlatforwhichIpayHomeLoan.InowwanttoshifttomyparentsplacebypayingaRenttomyMom(AroundINR12K–14K)whichisinadifferentCity(Ghaziabad)butinDelhiNCRitself. ThereasonforshiftingisthatIwanttobewithmyparents,butsincemyDadisretiredIdontwanttofinanciallyburdenandhencewouldbepayingtherentandthiswouldmakemyflatbeEmpty(Whichisfinewithme) MyQueryisthatCanIclaimbothHRA&TaxBenefitonmyloanandwouldtherebeanyITimplicationsindoingso. DearPrateek, Yes,youcanclaimtaxbenefits&HRA,both. HiSreekanth, Firstofallletmecongratulateyouonhelpingusout. IamfacingaproblemandIseekasolutionforit. Ipurchasedapieceoflandandconstructedahouseoverit.Itookajointhomeloanwithmyspousefortheconstruction.TheinitialloanwasfromHDFCwefJul14whichwastransferredtoLICwefJul16. AtthetimeofclaimingITrebateisubmittedacompletioncertificatewithanissuingdateofMar16alongwithLICdocumentsofJul16.Nowmyacctsdeptistreatingmyhousebuildingloanasloantakenforrepairsandgivingmeabenefitnof30,000only.Pleaseguideme. Thanks DearRohit, MayIknowthereasonstatedbyyourCompany’sAccdept? Didyougetthepossessionofthehouse? Heremycurrentsituation…. Iowntwohomesinthesamecity(jointhomeloanswithspouse).Istayrentedatadifferenthomeinthesamecity. Whatwepay– Home1–Around2,00,000interest Home2–Around7,00,000interest(includingpre-emicalculations) HRA–Around2,50,000ayear(afterallhracalculations) Whatwereceive– IncomeHome1–Around1,75,000(afterdeductionsetc) IncomeHome2–Around2,25,000(afterdeductionsetc) Question1-CanIdeclareHRAandhomeloaninterestinthefollowingmanner… Self–Interestforhomeloan1andhomeloan2(2,00,000+2,00,000)&declareincomeofhomeloan1(1,75,000) Spouse–HRA(2,00,000)andhomeloan2(2,00,000)&declareincomeofhomeloan2(2,25,000) Anyinsightswillbemuchappreciated. DearRaghav, MayIknowwhoisreceivingHRA?Arepropertiesjointlyowned? ForFY2016-17–InterestpaymentsofRs2LakhandRs7Lakhcanbeclaimedfullyu/s24. FromFY2017-18–thiswillbelimitedtoRs2Lakhonly. Kindlyread:Budget2017,keyDirectTaxproposals. Thanksfortheanswers… MayIknowwhoisreceivingHRA?Arepropertiesjointlyowned? Thepropertyisjointlyowned. ForFY2016-17–InterestpaymentsofRs2LakhandRs7Lakhcanbeclaimedfullyu/s24. FromFY2017-18–thiswillbelimitedtoRs2Lakhonly. isntit2lakhslimitonlyfortheletourproperty?Inmycasedoesn’tthisbecome4lakhssinceitisjointhomeloan? Alsoforselfoccupieditisagainanother2lakhsright? DearChintu/Raghav, (Kindlypostyourqueries/responseswiththesameDisplayname) Yes,eachtaxassesseewouldgettoclaimuptoRs2Lakh.Injointlyownedproperty,itisuptoRs4Lakhs(forbothownersputtogether). However,IbelievethatthisRs2Lakhlimitisforallthemultiplepropertiesownedbytheindividual. HiSreekanth, IhaveahomeloanforselfoccupiedflatforwhichIamtakingtaxbenefits.NowIamplanningtotakeuptopuploan. Ilearntfromnationalizedbankthattherewillbeseparateaccountfortopuploan.Insuchcase,bankwouldissuetwoseparateinterestcertificates.So,howcanItakeadditionaltaxbenefitfortopuploan?CanIshowtwointerestcertificatesfortaxbenefitforselfoccipiedflat? Kindlyadvice. Regards Thanks Madhu Dearmtl, Yes,youmaydoso,butuptoRs2Lakhu/s24forinterestpayments. HiTeam, Ineedsomehelpfromyou,itsrelatedtoLetoutproperty.ActuallyIhavetwoflatsoneIhavepurchasedin2014andgotthepossessionforthesameinApril2016andinAug,2016Ipurchasedanotherflat.Boththeflatsareinoutskirtsofthecitysobothhavebeenrentedout.ThistimeIwasabletodeclareonlyoneflatinLetOutPropertyasfortheotherflatIamyettopaythepropertytaxandEBnametransferisalsonotdone.Somyquestionsare:- 1.CanIdeclareboththepropertiesasLetOutandalsoclaimHRAbecauseIamstayinginrentedflatneartomyofficeandbothmyflatsaremorethan30kmshenceIneedtorentbothofthem. Note:InmycompanyportalwhiledeclaringIncometax,Iwasabletosubmitdetailsforonly1flatonlysothecompanyHRtoldmethatIcanclaimforotherflatwhilefilingreturns. 2.Asfortheyear2017-18,govthasputthecapof2lakhonthehomeloaninterestonLetOutpropertiessimilartoSelfOccupiedpropertysoIwantedtoknowifIshowboththepropertiesasLetOutthen2lakhinterestcapisoverallorthislimitisforeachproperty? 3.CanIshowthepreEMIinterestformyfirstflatforwhichIhadtakenloaninJan2014andIgotthepossessionofthesameinApril2016?AsIdidntsubmitordeclaredanythinginIncometaxformyfirstflatin2016,canIdeclarethesame(preEMI,interestpaid,princialpaid)inFY2017?? DearHoshang, 1–Yes,youmaydoso. 2–Ibelieveitisforoverall.Read:Budget2017&importantDirectTaxproposals 3–Kindlyread:Under-constructionproperty&Taximplications. ThanksalotSreekanthforyourquickresponse.Ialsowanttoknowastheoverallcapisof2lakhsforLOP(whetherthereisoneormore)sohowthiscarryforwardoflossofinterestamountresultingfrommultiplepropertieswillwork?Iknowthatwecanclaimitin8subsequentyearsbutiwanttounderstandhowitwillworkbecauseifapersonispaying4lakhsofinterestonLOPsafterdeductingrentand30%NAVstillhewillbepayingmoreinterestonlywhichmeansatleastfornext3-4yearshewillbepayingmoretaxasthelimitisonlyupto2lakhs.SothatcarryforwarsbenefitwillonlybenefitofthenetlossfromLOPbecomeslessthan2lakhs. DearHoshang, Yourunderstandingiscorrect. That’swhyinmostofthecases(majorpartofhomeloantenure),theselosescanbejustDeadloses. HiSreekanth, Iliveinbangalore,Ihaveanapartment,whichisletout.AlsoIhaveahouseinaplotinthesuburbs.HoweverIstayclosetotheofficeinarentalhometoavoidtraffic.Bothpropertiesareownedfullybyme.Thehouseintheplotisvacant.Ishouldbeabletogettreattheinterestonhomeloanforthevacanthouseintheplotasselfoccupiedhouse,thentheapartmentasletoutalongwithHRA.Kindlyprovideyourguidance. DearArvind, YoucanclaimHRAandtreatthetwopropertiesasLet-outones. Read: Incomefromhouseproperty&taxbenefits. Budget2017limitslossonpropertytoRs2Lakh! Iown2HouseProperties.1inmynameandtheotherisjointlyownedbymySon.IresideatProperty1whichisownedbyme(SOP)andmysonresidesatProperty2.Willproperty2beconsideredasDLOPforme?Ifyestillwhatextent? AlsocanmysonclaimitashisSOPandstilldoIneedtoconsideritasDLOP? DearJinavJi, Asyouowntwohouses,andyouaredeclaringthepropertysolelyownedbyyouasSOP,theotherpropertyhastobedeclaredbyyouasDLOPonly.IbelievethathecandeclareitashisSoP. DearSreekanthji, IfmySonwilldeclareitashisSOPdoIstillneedtodeclareitasmyDLOP?CanonepropertybebothSOPandDLOP? ThankYouforquickreply DearJinav..Yes,itcanbe. HiShreekanth, Ihave2flatinthesamelocality.Inboththeflatsmywife(Housewife)isaco-owner. 1stonehasnoloanbutrentedout.TheotheroneisSOPandthereisahomeloanonit. HowmuchsharecanIcanshowformyinIncometaxforthefirstflat. Thanksinadvance. DearGaopal, Youhavetodeclarerentalincomeasperyourshareintheproperty(firstone).Bydefaultitwouldbe50:50. Iamcentralgovtemployeeandlivingingovtallotedhouseindelhi,caniclaimrebateonincometaxfrominterstpartpartofhousingloanfrombankinNCRregionkindlyclearifyundersection24 DearMrPant..AreyoudeclaringitasaLet-outproperty? IhaveaflatinNasikanPuneonwhichHomeloanisavailed.IworkinPuneandIamstayinginarentedproperty. CanIclaimInterestonHousingLoanforbothpropertiesandalsoavailHRA. DearTejaswani..Yes,youcandeclareboththepropertiesasLet-outoneandalsoclaimHRA. Iamaretirescientistbutstayinginarentedhouse.IHAVEownhousewhichis7kmawayfromtherentedhouseinthesameplace.KindlyadvicemecanIavailhouserentclaimofRs5000/permonth. DearKarisiddaiah, Yes,youcanclaimHRAastheownhousecanbedeclaredasLet-outpropertyinITR. istayinginPunecityGovermentQuaterihadnotreceivedHRA&Ipurchasedonehousepropertyinsamecitycaniclaiminterestexemptionu/s24. Reply DearSmita, Yes,youcanclaim.. HiShreekanth, IhavegotthepossessionofmyunitinGurgaonfewdaysback.Iamplanningtoputitonrent,howevernotsureifiwillgettenantbyMarchoritwillbevacantforFY16-17.IamstayingonRentinNoidaandwouldliketoknowificanclaimtheunitasletoutordeemedtoletoutunitandclaimtheentireHousingLoaninterestpaidu/s24+preconstructioninterest(1/5th)toclaimitasapartofletoutproperty.OrwillitbeconsideredasSelfoccupiedpropertyifitstaysvacanttillMarch. Thanks Deepak DearDeepak, YoucandeclareitasaLet-outpropertykeptvacantandclaiminterestpaymentsu/s24.(RentalincomewouldbeNIL). ThanksShreekanthforyourpromptreply.Soitmeansicanclaimtheentireinterestpaid(3.5lac)forthisFYandnotjust2lacsasperselfoccupiedrule. BestRegards, Deepak DearDeepak, Self-occupiedrule? Incase,youdeclareitasSoPthenceilinglimitwouldbeRs2Lakhonly. Kindlyread:Budget2017&Keydirecttaxproposals. HiSreekanth, Requestyoutokindlyanswermyqueryasbelow. ThereisonepropertyinDelhiwhichisregisteredonmymother’snameonly,however,inthehousingloanagainstthatpropertyIamtheprimaryapplicantandmymotherismentionedasaco-borrower. Ijustwantedtocheckif 1–Icantakethededuction(100%)fortheinterestpaidonhousingloan. 2–IfIcansplitthededuction(50:50)betweenmeandmymother. PS–ProvisionalInterestCertificateissuedbythebankhasbothofournamesinit. DearAmit, 1&2–No.Asyouarenotco-ownerorowneroftheproperty(Kindlyread:Jointhomeloan&taximplications) HiSreekanth! Pleasereviewthefollowingcase:- Acompanyownstwoflats,foroneofthehouses,bankloanwastakenforconstruction.HouseNo.2isgivenonamonthlyrentofRs10,000. IntheAgreementofpurchase,houseismeantonlyforresidentialpurpose. 1.WilltherebeanyincomeunderIncomefromHouseProperty? 2.WillinterestonbankloanbeallowedasanexpensewhilecalculatingGrossTotalIncomeofthecompany? 3.WillthefirsthouseagainstwhichbankloanisobtainedbetreatedasanSOP?IdontthinkacompanycanpossiblyownaSOP DearSagar, Ithastobetreatedascommercialpropertyandlet-outone. Read:Incomefromhouseproperty&taxbenefits. DearSreekanth, Asitistobetreatedascommercialproperty,interestexpensewillbeallowedunderBusinessorprofessionright?Theflatwillbeusedforresidentialpurposeofemployeesanddirectors. IamawarethatrentalincomeofRs10000permonthfromHouseno2willbetaxedunderIncomefromHouseProperty. DearSagar..SuggestyoutoconsultaCAinpersonandtakeadvice. DearSreekanth Thanksforsuchinformativedetail. Ihaveaquery,currentlyihaveahomeinbangalorewhichispurchasewithaloanandhaveclaimedtheITrebateonthatinterestandprinciple. ItoohaveboughtapropertyinCochinwhichisrentedout,willitpossibletoclaimexemptiononthe2ndhomeandwhatadditionalbenefitwillibeabletoclaimformthe2ndhome. Canyouguideme. Thanks DearSandy, Haveyoutakenhomeloanonthesecondpropertytoo? Kindlyread:Incomefromhouseproperty&taxbenefits.. HiSreekanth Yesihavetakenloanonthe2ndpropertyanditisrentedout,thehouseiamstayingisdeclaredasSOPandhasthehighestinterestsohavebeenusingthatforthe2Lakhexemption. DearSandy, Youcanclaiminterestpaymentsastaxdeductionu/s24onsecondpropertyaswell. Kindlyread:Incomefromhouseproperty&taxbenefits. KindlynotethatBudget2017,hasbeenproposedtolimitthelossfrom‘incomefromhouseproperty’headtoRs2Lakhonlyandtheunclaimedlosscanbecarriedforwardtonextassessmentyears.ThiswouldbefromAY2018-19onwards. Hi, IliveonRentinNoidaandIhavemyownflatinGreaterNoida.Myflatisrightnowvacant.So,canIclaimbothHRAandHousingLoanInterset?AreNoidaandGreaterNoidatreatedasdifferentcitiesorsame? //Thanks DearAmit, IbelievethatyoucanclaimHRA&declaretheownpropertyas‘Let-outpropertykeptvacant’. HiSreekanth, IboughtanunderconstructionhouseinOct2016,homeloansanctionedinOct16.IstartedmyEMI(principalandinterest)fromNov16.MyquestioniscanIclaimu/s80EEinthisyearornextyear.Sincemyhouseisstillunderconstructionandexpectedtocompletenextyear,myexpectedprincipalandinterestcomestoonlyRs.1.15lacswhichislessthanthelimitof2lac(incl80EE).Hence,canthisspilloverbeclaimedinnextyear.Iamnotexceeding1.50lacinthisyearandImissedthe80EEbenefit.Whereasnextyearpayoutwouldbedefinitelymorethan1.50lac,hencesinceIdidn’tclaim80EEthisyear,canIclaim80EEbenefitnextyear. DearNeema, ThelawissilentonthepointthatwhetherthisSectionisapplicabletoalreadyconstructedhousesorunder-constructionhouse.Intheabsenceofanyspecificinstruction,itisalwaysassumedthatitisapplicabletoeveryonei.e.itisapplicabletoalltypesofhouses. FirsttimeHomeBuyerscanclaimanadditionalTaxdeductionofuptoRs50,000onhomeloaninterestpaymentsu/s80EE.Thebelowcriteriahastobemetforclaimingtaxdeductionundersection80EE. ThehomeloanshouldhavebeensanctionedinFY2016-17. LoanamountshouldbelessthanRs35Lakh. ThevalueofthehouseshouldnotbemorethanRs50Lakh& Thehomebuyershouldnothaveanyotherexistingresidentialhouseinhisname.” HiSreekanth, IownahouseinBangalorewhichIhavegivenonrentandIlivemyselfaswellinadifferentrentedapartmentinBangaloreonly,InthisscenariocaniclaimHRAandHousingLoanBenefitbyshowcasingmyownhouseasletOut? DearSumit..Yes,youcanclaimboth.. Hi, IwaslivingonrentfortheperiodApr-16toJun-16andthenIgotpossessioninJulyandshiftedtoownhouse.CanIclaimHRAforthesaiddurationandsimultaneouslyclaimdeductionundersec24forhouseLOANINTEREST. Thanks. DearShwet..Yes,youmaydoso. DearSir, Ihavemyown1BHKhouse(loanfree)inpunebutduetobigfamilywehaveshiftedto2BHKhomein(Samebuilding).AlsoWehavenotkept/givenourown1bhkinrent. PleaseletmeknowcaniclaimHRAfortherentedflat. Dearsnehil..Yes,youcanclaimHRAanddeclareyourownpropertyasDeemedtobelet-outone. MeandmyHusbandbothareworkingandweowned2BHKflatinPune.BothofushastakenloanwhereinheisPrincipalborrowerandIamsecondary. Itsanewlyconstructedbuildingwhichhascompletedon10Oct2016.Wehaveboughtthisflatforourownstay.WillIorhusbandbeliabletopaypropertytax? Ifyes,Canyoupleaseexplainhowwecalculatepropertytax,supposingthevalueofthepropertyis55Lac? DearArchana, Yes,youcandeductthepropertytaxwhencalculationyour‘incomefromhouseproperty‘. ForPropertytaxdetailsyouhavetovisityournearestPuneCorporationoffice/helpcentre. hiSreekanth, IownaflatinMumbaiwheremywifeand2childrenlive.IworkandstayaloneinPune,andamrentinganapartmentthere.IboughtasecondflatinmybuildinginJune2016whereIplantobringmyagedmother.ItookaloanforthesecondflatandpaiditoffinOct2016.Theinterestamountpaidisaround31,000. 1.CanIclaimHRAexemptionfortherentedflatinPune. 2.CanIclaimexemptionunderSection24fortheInterestpaidtowardsmyhousingloan. DearVicky, YoucanclaimHRAforthemonthsofArpr&May. Yes,youcanclaimtaxdeductionu/s24(provideditisnotanunder-constructionpropertyandthepossessionisgiven). Sreekanth, Thankyouforyourquickresponse. ThetwoflatsiOwnareinMumbai,whereastheflatIamrentingisinadifferentcity,Pune.CanInotclaimHRAforthefullyearAprtoMar? HiSreekanth,manythanksforyourarticle.Helpful–butjusttodoublecheck,pleasehelpaddressmyqueryasfollows.Ihave2properties–1inNoidaand1inGurugram.IlivewithmyparentsinNewDelhi.TheNoidapropertyhasbeenrentoutforentire12monthsandtheGurugrampropertyfor7months.IunderstandfromthisarticlethatnoneofthemcanbeclaimedasSOPandrentalincomesfrombothpropertieswillbeneededtobeshowninITRsubmission.Pleasehelptoconfirmtheunderstanding.IfIhaveunderstoodincorrectly,pleaseadviseforthesame.Idon’thaveanyoutstandingloansonbothproperties.ThanksandRegards,Amit DearAmit, Yes,youcandeclarebothproperties(own)asLet-outonesandrentalincomeshavetobeshowninyourincometaxreturn. HiSreekanth,manythanksforyourkindresponseandconfirmation.Regards,Amit HiSreekanth, IhavetakenahomeloanjointlywithmymotherforapropertyinRanchi(inme&mymother’sname(Co-Owners)).IliveinBangaloreinarentedflat.Iamproducingadeclarationfrommymotherthatsheisnotclaiminganytaxbenefitsfromthisproperty(Assuggestedbymycompany’sfinancedept).Myquestionsare: 1.CanITakebenefitforboth–HRAandHomeloan(asMyparentsarestayingintheownedflatinRanchi)? 2.IfIdeclareittobelet-outproperty,canishowtheincomefromrentas0(zero)? Also,pleasementionanyspecialthedocuments/declarationIneedtofurnish. DearRanjan, 1–Yes. 2–No.Youneedtodeclarerentalincome. Sreekanthgaru, Thanksforthemostinformativedocument,requestyoutoanswermyquery. Iboughtahouseinmyhometownandgaveitforrent(8000Rs/month),Iampayingloanonthesame,Principle:39416TowardInterest:362499. IamstayinginanotherplaceforworkpurposeandpayingrentandclaimingHRAforit,myqueryis,howwouldtaxinterestpartbecalculatedontheloanamountconsidering39416(principle)wouldgoin80C? woulditbeInterest–rentreceived=taxbenefit? 362499-96000=266499 Dearpavan, Yes,EMIhastwocomponentsnamelyPrincipal&Interestrepayments. Principalpartcanbeclaimedundersection80c. Interestrepaymentscanbeclaimedu/s24. Suggestyoutoreadthisarticle:Incomefromhouseproperty&taxbenefits. Hi–Ihaveahousewith2floors.IliveonGroundfloorandTenantshaveoccupied2ndand3rdfloor.Thoughmyhousestandsonasinglesitedoesitcomeunderthedefinitionof‘oneproperty’.CanIuseITR1inthiscasetofilemyreturnswhereIcanclubboththerentsandshowas‘one’fromletoutprop? Regards,John DearJohn, Ibelievethatifpropertyisentirelyselfoccupiedorentirelyletout.ITR-1isanappropriateform(subjecttootherconditions). Kindlyread:WhichITRformtofile? DearSreekanth, Thankyouforsharingtheknowledgeyouhaveacquiredanddoingthisservice. Ihaveonedoubtandneedfurtherclarification,inthisregards. Iamasalariedperson,livesinDelhi.Iownahousewherethegroundfloorisaletoutpropertyandthe1stfloorusedforresidentialpurposebyme.Fortherental,IamalreadypayingthetaxduetowhichIreceivedlesseramounteverymonthascomparedtotheoriginalrentagreement. Somyqueryis: 1) Whilefilingthereturn,doIneedtopaythetaxesagainas“incomefromproperty”oritcanexemptedbysubmittingthetaxdeductioncalculationsheetreceivedfromtheletoutparty. Also,Igetthetaxdeductiondetailsaftercompletingthe2016financialyear,sodoIneedtomentionthisinmyofficetaxdeclarationformoritcanbeshowedwhilesubmittingthereturnfile? 2) Inthecurrentscenario,isthereanywaybywhichIcanavailthebenefitofHRAtoo? DearGKumar, Iamunabletounderstandthis“Fortherental,IamalreadypayingthetaxduetowhichIreceivedlesseramounteverymonthascomparedtotheoriginalrentagreement.”?? Youcandeclareittoyouremployerandifthatisnotpossible,youcandisclosewhenfilingyourincometaxreturn. 2–Asyouareresidinginyourownhouse,kindlynotethatyoucannotclaimHRA. HelloSreekanth, IhaveahomeloanandcurrentlymyemployerisaskingforthePANdetailsoflender(SBHinmycase)asperthenewnotificationS.O.1587(E)dated29thApril2016(#2.(3)).TheBanktellsmethattheydonotsharethePANdetails.Whoisrightandwhoiswrong? BR, Nithin DearNithin, Youremployeriscorrect. HiSreeKanth, Thanksfortheveryinformativearticle.Hereismyquery, IboughtanapartmentduringMay2016inthecitywhereIlive.AstheapartmentwasinfinishingstageIdidnttakemoratoriumperiodformyhousingloan.IstartedpayingEMIfromJuneandreceivedpossessionoftheapartmentinOct2016.CurrentlyinteriorworkisinprogressandIstayinarentedhouse.ApartmentwouldbereadybyJan2017endandamplanningtooccupybyFeb2017.myqueryis 1.WillIbeabletoclaimHRAfortheperiodApril2016-Jan2017?andalsohousingloaninterest 2.CanIclaimwholeinterestpaidfortheFYyearoronly2lakhs,oranyother?. 3.howwouldyoucallthiscase?isitselfoccupiedpropertykeptvacant? Lookingforwardtohearfromyou.ThanksinAdvance Onemorequestion,asamnotsureifIwilloccupymyhouseorrentout. 1.InwhichcaseIcanclaimfullHRAandfullinterestpaidforloan,isitforselfoccupationofpropertyorforletout.? InbothcaseIcandoonlyfromFebruary2017.OnTaxbeneficialwisewhichisbetter.Pleasesuggest. DearSbanta..Fromtaxationviewpointalone,rentingoutcanbeabetteroption. Dearsbanta, 1–Yes,bothcanbeclaimed. 2–Ifisforself-occupationthenRs2Lakh,elseentireinterestpaymentcanbeclaimed. Read:Incomefromhouseproperty&taxbenefits. 3–Whatisyourplan?Areyougoingtogiveitonrent? HiSreekanth, ThisisSuryafromBangalore.Ipurchased2BHKinBangalore,inthatmyparentsarestaying.Iamstayinginrentedhouse.canIclaimbothHRAandhomeloanbenefits? DearSurya, YoumayclaimHRAanddeclaretheownpropertyasLet-outonetoclaimtaxdeductions.KindlynotethatyouthenneedtodeclareRentalincometoo. Incase,youwouldliketodeclareitasaSOP,youmayhavetojustifyyourclaimofHRA&taxexemptiononSOP.(thiscanbepossible,ifyourpropertyisfarfromyourworklocation). HiSreekanth, Ihaveaflatinbanagalore(presentlystaying).IhavealsopurchasedahouseinKeralathisyear(parentsstaying) InterestpaidonKeralahomeloanismorecomparedtoBanagalore. DoineedtoshowoneasLetoutproperty…Ifyeswhichoneshouldigofor.IsthereaminimumvalueonAnnualLettableValue? Pleasehelp AdditionalInfo-Interestonhousingloan(Kerala)-170211/-&Interestonhousingloan(Blr)-49448/- DearSujith, YouhaveachoicetooptforeitherofyourSOPaslet-outone. YoucandeclarekeralapropertyasLet-outone. Kindlyread:Incomefromhouseproperty&taxbenefits. HISreekanth,Ihave2flatsonmyname(Bankloanpaidoff)insamecityand3rdco-ownedwithmywifeonloanwithEMI48kinsamecity.Welivein4thflatinsamecityownedbymywifeonhermaindenname.HowcanIandmywifeclaimtaxbenifitsconsideringallother3flatsronrent. DearSamuel, Kindlyread:Incomefromhouseproperty&taximplications. HISreekanth, CanIshow1oftheflatasselfoccupiedwhilebothflatsonmynamearerentedout.Similarlymywifecanshowselfoccupiedtheflatwhereweliveinwhichisonhernameandothersasletout? DearSamuel, TheSOPdeclaredbyyou/yourspouseshouldbesame. Thanksforwonderfullyexplainedarticle!Igotonequery..couldyouhelponthis.. Ihavetwoproperties.Bothco-owned.Oneco-ownedbymeandmywife(itisselfoccupied).Otherpropertyisco-ownedbymeandmymother(whichisoccupiedbyparents.note:motherisco-owner). Inthiscase,canIassumebothasaSOPfortaxpurposetoo?thanksinadvance. DearSumit, AnyofoneofthepropertieshastobedeclaredasLet-outone. HiSreekanth, Wehavetakenajointhousingloan(Me,Father&Mother)andthepropertyisinmymothername.Iamstayinginadifferentplaceduetomyemployment.SocanIclaimtaxbenefitforInterestonSOPandRepaymentofprincipletowardshousingloan(80c)formyproportion(evenbank’sintresentcertificatereflectsallthreenames)?alsotakeabenifitofHRAexception?Ifyespleaseadvisewhatshouldifillintheformofverificationforbelow –whatwillbetheIncomefromhouseproperty(incaseofloss,enclosecomputationthereof)andothersubitemsifany –shouldIneedtosubmitanyotherproofsapartfromBank’sinterestcertificate? Thoughtofmentioningloanwastakingin2011fromBankAandthentheholeamountwastransferredtoBankBin2015 DearHarsha, Asyouarenottheowner/co-owneroftheproperty,youcannotclaimtaxbenefitonhomeloan. YoucanclaimHRA. HiSreekanth, Ihavetwohouses,oneinpuneandotherinMumbai.InPunemyparentsarelivingandInMumbaiiamstayingasmyofficeisinmumbai nowifishowpune’shouseasSOPandmumbaioneasdeemedrentedout,caniclaimthebelowexemptions 150000under80Cforpunehouse 200000interestforPunehouse entireinterestonmumbaihouse HRAexemptionformumbaihouse(ifishowthatIhavegivenmymumbaihouseonrentandiamstayinginrentedhouse) pleaseadvise DearKiran, YouhaveachoicetodeclarewhichhouseasLet-out,butIdoubtifyoucanclaimHRA. ThanksSrrekanth,thathelps Canyoualsotellmethaticanclaimstampdutyandregistrationchargesforresalepropertyorisitonlyallowedfornewconstruction? DearKiran, Onecannotgetdeductionforstampdutyandregistrationchargespaidforaresoldhouseproperty. We(meandmywife)arestayinginmyparentalhome.Ihaveacquiredourfirstflatinthesamecitybytakingajointloanlastyear.Thisyear,Ihavegivenitinrent.IdontclaimHRAexamption.NowcanIclaim2Lackdeduction(interestonhomeloan)asitnomoreselfoccupied?Ifyes,shallIclaimentire2Lakhor2Lakh-rentalvalue? DearSayan, Ifyouhavegivenitonrent,youcanclaimentireInterestpayments(homeloan)astaxdeductionu/s24. Kindlyread:Incomefromhouseproperty&taximplications. Hi, IowntwoflatsinPune.Igotthepossessionofbothflatsin2016.Oneis3BHK(EMIisRs.60,000,annualinterestisRs.6,00,000,itisself-occupied)andsecondis1BHK(EMIRs.25,000andannualinterestRs.2,50,000,itisonrentandmonthlyrentalincomeisRs.10,000) AsperIncometaxlawforself-occupiedpropertyIcangettaxbenefitRs.2,00,000(max)onInterestcomponentbutforletoutpropertyitisfullinterestcomponent. Inmycase,tosavemaxincometaxshallIshowmy3BHKasletoutandgetfullinterestbenefit(althoughitisself-occupied)? Pleaseconfirm. Thanks Paresh DearParesh, Yes,youmaydoso. ThanksSreekanthforquickreply.AreyousureitiscorrectasperIncomeTaxLaw?AsIgave1BHKonrentanduse3BHKforselfbutthenhowIcanshow1BHKforselfand3BHKonrent?Rentof3BHKisaroundRs.15,000butfrom1BHKIamonlygettingRs.10,000.Pleaseconfirm HiSreekanth, IPurchasedflatinChennaifor15lakhswithloanfromLICHFL. Ithesamehousemeandparentsarestaying. Lastmonthallofmyloanduesgotcleared.ForthisfinancialyearhowcanigetHRAexception?aswellnextfinancialyearwhetheriameligibletogetexceptionfromHRAamount? DearMani, Asthepropertyisself-occupiedbyyou,youcannotclaimHRAexemption. PropertyshouldnotbeinyournametoclaimHRA,ifyouwantoavailitthenyouwouldhavetotransferthepropertytoyourparentsname. HiSreekanth, Iamhaving2housesindifferentcities. Onehouseinamstayingduetomyprofessionalreasonsforlast2years. Theotherhouse-isinmyhometownandbeeninmypossession/titleformorethan12years. Inthelatterhousemymotherstaysandme&myfamilystayduringourvisittohometown–thecumulativedurationofthestaysinthehouseinmyhometownusuallyexceeds60daysinayear. UnderthiscircumstancewhatismytaximplicationandcorrespondingITActsection/clausenos. Iamhavingnoloanonanyofthehouses. Canyoupleaserespondtomyquery. DearPramit, Asbothofthehousesareself-occupied,youhavetheoptiontochooseeitherofthepropertiesasSOPandtheotheroneasLet-outone. HiSreekanth, Ihaveaquestion.IhaveatwostoriedhousewhichIhavetakenonloanwithjointownershipofmywifeandmyfather.Iampayingthehousingloaninterestcompletely.Istaytogetherewithmyparentsinonefloor,theothertwofloorhousearebeingrentedout.Theentirerentmoneygoestomyparentsfortheirlivingastheyareover60yearsatsenioranddonothaveanyothersourceofincome.CurrentlyonlyIamclaimingtaxbenefitsoninterestandprincipalasIamtheonlyearningmember.willtherentalamountreceivedwillalsobetaxabletomeasthehouseisoriginallyinmyname?willIhavetoshowthatincomeaswell? DearSumanth, Jointownership? Butinthelastsentence,youhavementionedthatitisinyourname? IfyouarethesoleownerofthepropertyandyouarepayingtheEMIsthenyoucanclaimtaxbenefits. Also,therentalincomehastoincludedinyourITR. Read:Incomefromhouseproperty.. HiSreekanth, Thankyouforreverting.theHouseownershipisthreepeoplename.IamtheprimaryapplicantwithmyWifeassecondaryandmyFatherthethird.asthepropertypapershasmynameincluded,shouldbedeclaringtherentalincomeeventhoughIdon’tgetanyanditgoestomyFather?Hopethisgivesbetterinsight. DearSumanth, Ifthepropertyisjointlyownedthentherentalincomehastobedisclosedinthetaxreturnaspertheshareofownershipintheproperty. Hi,Idohaveaquery.Iambuyingahouseinadifferentcity.Thisismyfirsthouse.Iwillgiveitforrent.CanIclaimthispropertyasletoutproperty.? DearPRABAL..Yes,youcan.. Read:UnderstandingTaxImplicationsofIncomefromHouse/Property IhavereceivedpossessionofmyapartmentinJunethisyear.Since,theinteriorsworkisinprogress,wewillbeabletostartlivingthereonlyinJannextyear.Tillthattimeweareinarentedapartment.IwanttoclaimHRAtaxbenefittillDecemberafterwhichwewillmovetoourownhouse.CanialsoclaimtaxbenefitforinterestpaidonhomeloanthatIhavetakenforthishouse?Ifyes,howmuch,pleaseadvise. DearMeghana, Yes,youcanclaimtheHRAbenefitforthesaidperiod. Howmuch??–Itdependsontheloanamount,tenure&rateofinterest. Suggestyoutogothroughthebelowarticlessothatyoucanhaveroughideaaboutthetaxbenefits; 1–Incomefromhouseproperty&taxbenefits. 2–UnderConstructionproperty&taxbenefits. HiSree, Ialsohavesimilarcase-sowilltherebecaponhousinginterestonthisnewpropertyoritwillbetreatedas”deemedtobeletout”throughouttheyearasitwaslyingvacantforpartoftheyear MyquestioniswhetherMeghnacanclaiminterestmax2Lakhsorthereisnocapifwetreatitasdeemedtobeletout Renu DearRenu, Therewon’tbeanycapifonetreatsitaslet-outorlet-outpropertykeptvacant. Mr.SreekanthReddy IamworkinginPUNEhavingpropertyA(1BHKSingleowner)inPUNEhomeloanofpropertyAisNIL. nowihavepurchasedpropertyB(2BHKjointowner1stownerismywife&iamsecondowner)inPUNE homeloanisonmynamebecausemywifeishousewifesheisnotworkingwomen. butfrombeginningiamstayinginMUMBAIwithmyfamilyonrent&clammingHRAbutworkinginpuneeverydaymorningiamcomingtopune&eveningbacktoMUMBAI. MypropertyAisvacant&havingnoanyhomeloanandidontwanttoshowitinmytaxdeclarationform. PropertyBIwanttoshowasLetoutproperty&wanttoclamtaxexemptionof3,60,000/-outofthat60,000/-willbeincomefromrentofpropertyB. sototalexemptioniwillgetwillbe3,00,000/- AndiwillcontinuestayinginMumbaiandIwillclamHRAasusual. Pleasenoteiamhavingonly1homeloanformypropertyB. IstheaboveconditionisOK. DearJay, Mysuggestionwouldbetodeclareboththepropertiesinyourincometaxreturn.It’sgoodtobehonestanytime! Youmaydeclarebothpropertiesaslet-outones(vacantoneas‘letoutpropertykeptvacant’)andclaimHRAtooasyouareresidinginMumbai. Readthisarticle:Incomefromhouseproperty&taxbenefits@http://www.relakhs.com/understanding-tax-implications-of-income-from-house-property/ Isthereanyexemptionforselfownedselfoccupiedapartmentforretiredpersons?Likepropertytax,maintenancepaidetc? Dearvyas..Yes,whiledisclosing‘incomefromhouseproperty’inyourIncometaxreturn,youcandeductpropertytaxand30%standarddeductionformaintenancepurposesu/s24. DearSreekanth, Iliveinmyownhouse(SOP).Ihavenohomeloan,nothing.Thereisnoincomeformefrommyhome–Imeannopartisgivenforrent. Isthereanytaxrebateforme?Requesttoinformthedetails. DearRavishankar..Youcanclaimmunicipaltaxes(Propertytaxes)&30%standarddeductionu/s24. Read:Incomefromhouseproperty&taximplications. Hi, Myproperty(ApartmentinChennai)thatwasunderconstructionforthelast4yearswashandedovertomeinApril’16.ImovedintothishouseinSep’16.FromApril’16toSep’16Iwaslivinginarentedhouse.CanIstillclaimtheentireinterestthatIhavepaidonthehomeloanastaxdeductionorwouldthecapofINR2lakhsapplyinthiscase. DearVikas..AreyougoingtoclaimHRA?YoucanclaimHRAbenefittillSep2016.Whendidyoutakehomeloan?(Date&month) Asitisaself-occupiedhouse,themaximumceilinglimitapplies. Kindlyread: Under-constructionproperty&tax-implications. Incomefromhousepropertyandtaximplications. DearSreekanth, Thankyouforyourquickresponse.Trulyhelpful. Regards VikasRadhakrishnan IamhavinganincomeofRs.20000/-fromapropertyjointlyownedinthenameofmywifeandmyself.CanIshowhalfoftheincomefromrentinmyincomeandrestinmywife’sname.Mywifedoesnothaveanyincome. DearArun…Yes,youcandoso. HiSreekant, Iamstayingincompanyquarterallottedtomywife(Perquisite)inCityA.Wewillgetpossessionofour1standonlyproperty(webothareco-ownersandco-borrowersforthis)inDec-2016whichisalsoinCityA.Ifwecontinuetostayinmywife’scompanyquartersandgiveourownedpropertyonrent,canweclaimfullinterestexemption(withoutanylimit)onthehomeloan.Canyouhelpmeplzonthis. Yes,bothofyoucanclaimthetaxbenefits,dearAbhi. HeySreekanth,thanksforthequickresponse.Canyouplzelaborateabitfurtherastounderwhichclausewebothcanclaimfullinterestexemption.Suppose8Lacsayearistheinterestdue,sowecanclaimthetaxbenefitonthisfullamount.Plzconfirm. DearAbhi, Yes,bothofyoucanclaimintheratioofyoursharesintheproperty.Bydefaultitis50:50underSection24..Bothofyouhavetodisclosetherentalincomewhencalculatingtheincomefromhousepropertyinyourtaxreturns. Readbelowarticles; Incomefromhouseproperty&taximplications. Under-constructionproperty&taximplications. Hello, Mymotherboughtahousesomeyearsbackandregisteredmeasajointowneralongwithherself(Howevertheentirepurchaseamountwaspaidbyher).Iamnowplanningtobuyahousepropertyinmynameandwillbeavailingofahousingloanforthesame.Willthishousebetreatedassecondhousepropertyforme?IncaseIshowthisasSOP,willIneedtopaydeemednotionalrentonthefirsthouse–@50%asIamaco-owner(eventhoughIhavenotmadeanycontributiontowardspurchaseofthesame)?Pleaseletmeknow. Thanks, Rishi DearRishi, Asyouaretheco-ownerofthefirstproperty,onceyouownthesecondonethenitmeansthatyouaretheowneroftwoproperties. So,ifyoushowthesecondpropertyasSOPthenyouhavetodeclaretheotherpropertyasLet-outone.(assumingboththepropertiesareinsamecityortown). DearReddyji, Iwantknow,ifonepropertyownedbyhusband&onebywife,thenwillitbeconsideredsecondpropertyofhusband&deemedlet-outorwillitbeconsideredfirstpropertyofwife&asSOP. DearManoj..Ifapropertyownedbyahusbandisself-occupiedthaninthatcaseitisaSOPandtheotherpropertyifownedbywife,can’tbeSOPideally,theonlyscenarioisifherparentsliveinthatproperty. AnAssessepaysrenttohisparentsandclaimsHRAfromhiscompany,CanheclaimHousingLoanforthesamepropertyonanyadditions? Pleaseadvise. DearSELVAN..No.Thepropertyisownedby?? HiThere, IcompletedmyHousingLoanonthepropertyboughtincityA&ithasbecometheselfoccupiedproperty.Iamplanningtogivethishousetomyparents/spouseforstaying(notitletransferwillbedone)&iwillbemovingtoanotherrentedhouseclosertomyofficeinthesamecityA.Howevermyparents/spouseisnotgoingtopayanyrenttomeforthishouse. CaniclaimHRAastaxexception?Pleaseadvise DearGanesh, Ifyoucanjustifyyourstand,youcanclaimHRAandalsodeclareyourpropertyasSOP(andshow‘incomefromhouseproperty‘asnegativefigureinITR). dearsir, ihavepurchasedapropertyinmyhometownA.IamlivingincityBinagovernmentaccomodation.NowmysisterstaysintownAwithmyparents.Canileasemyhouseouttomysister.Hercompanywillpayleasetome(theowner).Howwillireportthisincome? Dearanshul..Yesyoucanlease/rentitouttoyoursister.YouhavetoreporthisasrentalincomeanddeclarethepropertyasLET-OUTwhenfilingyourincometaxreturn. Read:Calculationofincomefromhouseproperty.. Hi, Ihavea2Bhkflat,andinthis1bedroomIletout,sohowtoshowthisintax,AsItoostayinginsamehouse. Thanks&Regards, Ramesh DearRamesh, Youhavetocalculatetheincomefromeachportionseparately. Let-outportionasLet-outpropertyandtheSelf-occupiedportionasSelf-occupiedproperty. Propertyrent&Interestpayments(homeloan,ifany)canbeapportionedbetweentheletoutportionandself-occupiedportiononBuilt-upareabasis. HiSreekanth, IlivewithmyparentownedhouseandclaimingHRAasgivingrenttoparents.butInJuneiownedahouseinsamebuilding.thenewlypurchasedhouseisunderrenovationandiamnotstartedstayingthere.CanimakethatasSelfoccupiedpropertyandalsoclaimHRAformyparentshousewhereiamstayingnow. Regards Deepakparab DearDeepak…No,youcannotclaimHRAifyouaregoingtoself-occupytheproperty. HiSreekanthReddy, IhaveonehouseloanandmypropertyininIndoreandthatflatisvacant.IamworkinginKolkataandstayinginrentedhouse.IalsowanttopurchaseoneflatinMumbaiformyfamily.Howcanigetthemaximumtaxbenefitintheabovecases. DearTeena, YoumaydeclareboththepropertiesasLet-outonesandalsoclaimHRA. Read: Incomefromhousepropertycalculation.. HiSreekanth, I’mplaningtopurchaseanunderconstructionpropertyonmyparentnamebutloanwillbeonmynameandI’llbepayingEMIforthisproperty.Sincethispropertywillbeonmyparentname,canIclaimHRAforthispropertywhenIstayhere(afterconstructioncompletion)aswellgetexemptiononPrincipalandInterestofEMIboth? Pleasesuggestmetoavailmoretaxbenefit,onwhosenameIshouldregisterthisunderconstructionproperty. Thanks, Daya DearDaya, YoucanclaimHRA,meaningyouarepayingtherenttoyourparents.Theyinturncanshowitasrentalincomewhentheyfiletheincometaxreturn. Asyouarenotgoingtobeanownerorco-owneroftheproperty,youcannotclaimtaxbenefits. Veryinformative.Ihave2housesbothinthesamecity.Iliveinone(SOP)andhaverentoutthe2nd(let-out).Iamretiredandhaveonlyapensionotherthanrentfromthe2ndhouse.Ihavetwoquestions: 1.CanIuseformITR1? 2.IfIaddthenamesofmychildrentothe2ndpropertywilltheybeliablefortax? DearJay, 1-IdeallyyouhavetofileITR2AorITR2. 2–Yes,rentalincomehastobesharedaspertheownershipratio.Incasetheyareminorkids,thenincomefrompropertywillbeclubbedtoyourincome. ThankyouSreekanth. 1-Washopingtohear,evenITR1willdo. 2.Willkeepitinmynamethen. Willbegoingthroughmoreofyourveryinformativewebsiteandmighthavecommentsinthefuture. SuredearJay.Keepvisitingandkindlysharethearticleswithyourfriends. Ihave1loanfreehousewhichIhaverentedouttoBankstaff. InadditiontoitIboughtsecondhousewhereIamstayingalsohavinghouseloanonit. CanIavailtaxbenefitonsecondhomehouseloaninterestforexampletheInterestamountis10lackshowmuchofitIcanavailasataxbenefit. DearAayush, TheoneoccupiedbyyouisSOPandthemaximumlimitisRs2Lakhthatcanbeclaimedastaxdeductionu/s24. Read:Incomefromhouseproperty&taxbenefitsonhomeloan. hishreekant Iown20%ofahousepropertywhilerest80%ownbymymotherindelhi.Ipaying100%(interest=95000,principle=174000)loan.butiliveinfaridabadbecauseofmyjobandmyparentsliveinthathouse.iwanttoclaimHRAwhichipayinginfaridabad.simultaneouslyiamalsowanttorebateinloanundersection24(2lakh)and80C(1.5lakh).IsthispossiblethatthishouseconsiderasSOPandialsogetbenefitofloandeduction. DearDevraj, YoucanclaimHRAasyouliveindifferentcity. Ideally,youcanclaimincometaxbenefitsaspertheownershipratio. ButifyouarepayingtheentireEMIsfromyourindividualaccountandifyourmotherisnotclaimingtaxbenefits,thenyoucanclaimthetaxbenefits. thanks, inwhichheadingshouldideductthisHRA fromgrosssalaryorfromanyotherheadingas80GGisfornonsalariedpersonandididnotsummitmyhouserentsliptomyemployer. DearDEVRAJ, YesyoucandeductthetaxexemptHRAamountfromthegrosssalaryu/s10andcalculateyourtaxliabilityaccordingly. Hi, Istayinflatinnameofmywife,andIhavepurchasedanotherflatonloan.CanIclaimentireinterestpaidinfinancialyear+Municipaltaxes+Standarddeductionundersection24? Ithinkflatwouldbeunderdeemedletoutcategory,soshouldIhavetoaddnotionalrentasincomeifflatisvacantforentireyear? DearHemant..Areyoutheowner/co-ownerofthenewproperty? Ifyes,youcanclaimthetaxbenefits.Ifitiskeptvacant,therentalincomewouldbeNIL. Read:Incomefromhouseproperty&incometaxbenefitsonhomeloan. Myletoutflatisinmywife’sname(only)andwebotharecoapplicantinloan. CanItakeloanbenefits?EMIisdeductingfrommywifesalaryaccount. No,dearGaurav. ThanksSir. Isthereanyworkaround? AlsowanttoaddthatIhaveonlyallotmentcumpossessionletter,propertyhasnotyetregistered. DearGaurav..Oneneedstobeanownerorco-ownerofthepropertytoclaimtaxbenefits. Hi, Iamstayinginaflat..SOPandpurchasedaflatinDelhibutyettoberegistered. FortheSOP..icanavailinterestofRs.2lakhsandprincipalofRs.1.5lakhs..total=3.5lakhs. WhatisthebestwaytousetheDelhiflattoreduceincometax? Thanks DearVenkat..YoucantreatthenewpropertyasLet-outone. Doyouhavehomeloanonthenewproperty? Read:Incomefromhouseproperty&incometaxbenefitsonhomeloan. Hishreekant, IhaveboughtoneresedentialpropertyforinvestmentpurposewhichIintenttoletout.IcurrentlystaywithmyhusbandandhencenoquestionofselfoccupationofthepropertywhichIbought.ThequestionisthepropertywhichIboughtwillitbeconsideredasdeemedtobeletouttillthetimeIactuallyletitoutandasaresultcanIclaimtheentireinterest(notrestrictedto2lacs). DearMamta, Ifyougotthepossessionoftheproperty-2,youcanconsideritas‘Let-outpropertykeptvacant’andclaimentireinterestamountu/s24. Forvacantproperty,therentalincomewouldbeNIL.Youcanalsodeduct/claimMunicipaltaxes(ifany)paid. Butkindlynotethatyoucandeductstandarddeductionof30%formaintenancepurposeifthepropertyiskeptvacant. Read:Incomefromhouseproperty&incometaxbenefitsonhomeloan. DearSir, IHaveOnlyOneSelfOccupiedProperty. Butididn’tshowitinIncomeTaxReturnFromLast10years. BecauseihavenoanyotherHouseProperty.orNoanyincomefromHouseProperty thereisanypenaltyoftaxforthis? DearSir, IhaverecentlyownedtwoflatsinthemonthofJuly2015inthesameapartment(oneingroundfloor&otherinfirstfloor).Boththetwoflatsareselfoccupied(i.e.inonemyself,wifeandchildandintheothermymotherandsisters). Thereisnohomeloanontheseflats. Canwetreatboththeflatsasselfoccupiedforthepurposeofincometax? Pleaseguideme. Dearakksarma, Whereanindividualownsmorethanoneself-occupiedresidentialproperty,anyoneofthepropertyatthediscretionoftheindividualisconsideredasaself-occupiedproperty(SOP).Hence,theotherresidentialpropertyowned,evenifnotactuallyletout,willhavetobeconsideredasa“deemedletoutproperty”(DLOP). ThankyouSreekanthReddygaru, IncaseofdeclaringoneofmyflatsasDLOP,whatamountshouldIconsiderasthedeemedletoutamount/income?AssuchIamnotgettinganyincomefromthehouseproperty.CanIshowasonerupee?Moreover,IamincurringapartmentmaintenancechargesRs.700permonthtoeachflat,payingpropertytaxRs.1000perannumetc.?Howtotreattheseamounts? Dearakksarma, YoucannotmentionRs1asrentalincome. Ifyouactuallylet-outtheproperty,youwillgetsomerentalincomeright,youcandisclosethatamountasyour‘Grossannualvalue’. Thekeypointhereis,notionalorfairrentalvalueofpropertyhastobereportedforIncometaxpurpose. FairRent:Itmeanshowmuchrentalincomeasimilarpropertyinvicinitycanfetchwithsimilarfacilitiesandamenities. Youcandeduct30%standarddeduction,municipaltaxes,homeloaninterestpaymentsfromtheannualvalue. Read:Incomefromhouseproperty&incometaxbenefitsonhomeloancalculation. Hi Istayedfor10monthsinrentalhomeandthenpurchasedandshiftedtherefornext4monthsoftheyearandstartedpayingEMI’ssimultaneously.Needclarificationontaxbenefits 1.underHRA 2.Principalrepaymentandinterestonloan Itisajointpropertyonmeandmywife’snamesandwebothareworkingprofessionals. DearSaahil..Youcanclaimbothfortherespectiveperiods. DearSir, IamworkinginHyderabad.Ipurchasedahouseinmynativeplacesixyearsbackandenjoyingthetaxbenefittilldateoninterestofapprox1.40lakhs.MyparentsarestayingeventodayandIhavedeclareditasselfoccupied.RecentlyIhavepurchasedaflatinHyderabadon2ndhomeloanandgoingtopayinterestaround3.50lakhs.Iamphysicallystayinginthesecond(new)houseforwhichIampayinglargerinterestonhomeloan.NowiwouldliketodeclarethesecondhouseasdeemedtoberentedouttoavailmaxbenefitasITexemptionandcontinuemyprevioushouseasselfoccupiedpropertywheremyparentsarestaying.Isisallowedtodeclaretheresidenceasadeemedtobeletoutproperty?Kindlyclarify. DearSuresh..Yes,youmaydoso. Thankyousir.Bydeclaringmypresentresidence(actuallyoccupiedbyself)asdeemedletoutIcansaveconsiderableIt. Regards Suresh Sreekanth, Ihaveahome1innativeonwhichIamclaimingITexemptiononhouseloan.Myparentsandfamilystaythere.CurrentlyIshowitasaletoutpropertywithrentalincome.IamworkinginChennaiandstaysinarentedhouseforwhichIclaimHRAexemption.NowIhavetakensecondhousingloanforhome2inChennaiwhereconstructionisinprogressandwillbecompletedonlyin2017.Ihaveplanstoletoutthenewhome2,andcontinuestayinarentedhome. IfIshowhome1asSelfOccupied,canIclaimHRAexemptionforrentedhouseatChennaialongwiththat?Aftercompletionofhome2,canIshowitasaletoutpropertyandclaimtaxexemption? DearNarendra, Yes,youmaydoso. Also,showthepropertywhichhashigherEMIoutflowaslet-outone. HiSreekanth; 1.IhaveaflatinCityA(throughhomeloan,8yearsold),ofwhichIamthesoleowner.IhaveanotherflatinCityB,(newlypurchased,withouttakingaloan)whichmywifeandmearejointowners(wehaveregisteredjointly).BothofusareITpayeessincelastfewyears.IstayinCityCincompanyprovidedhouseandmywifestaysinCityB(duetothenatureofourjobs)andpaysSocietyMaint+PropertyTax.FlatinCityAispresentlyunoccupied,andIpaySocietyMaint+PropertyTaxwithoutfail. 2.CanIshowflatinCityAasSelfOccupiedandmywifeshowflatinCityBasSelfOccupied?HenceIncomefromhouseinbothcaseswouldbeinnegativebasedonSocietyMaint+PropertyTaxbeingpaid.OrdoInecessarilyhavetoshowFlatinCityAorBasrentedout. DearVijay, IbelieveitcanbeabetteroptiontoshowtheCityAflatasLet-outpropertykeptvacant(rentalincomeasNIL)andshowtheentireinterestpaymentsonhomeloanastaxdeduction. Read:Incomefromhouseproperty&incometaxbenefitsonhomeloan. FlatinCityBasSOP. YoucanclaimHRAtooifitispartofyoursalarystructure. Hi, Ihaveahomeinmynamepurchasedwithownincomeandsonothavinganyhomeloan,iamlivingthere,henceiamdeclaringitasSOPandgettingHRAonit. Iamplanningtotakeahomeloanforanotherproperty,whatwillbethetaxandotherimplications? thanksandregards PrashanthML DearPrashanth, IfyouhaveownhomeandSOP,youcannotclaimHRA,willbefullytaxable. TheotherpropertyyoucandeclareitasLet-outandclaimtheincometaxbenefits. Read:Incomefromhouseproperty&taxbenefitsonhomeloan. IliveinUSandfilingtaxesinIndiawithNonResidentstatus.IownanapartmentinBangalorewheremyparentslive.CanthisbeconsideredasSelfoccupied? WhatisthevalueIenteragainst“”Annualletablevalueorrentreceivedorreceivable (higherofthetwo,ifletoutforwholeoftheyear,lowerofthetwoifletoutforpartoftheyear)”inthescheduleHouse_propertyforthis? Ialsopaymonthlymaintchargesforthisapartmenttohousingsociety.Arethesedeductible? DearGana, Yes. IfSOP,itisNIL. Yes,canbededucted. Read:Incomefromhouseproperty&taximplications.. Thanksfortheresponse.Ialsowentthroughyourotherpostsandtheyareallveryhelpfulandinformative. Justtoclarify Somonthlymaintenancechargesofaround1000Rscanbeclaimedasexpensesinthiscaseandsolossonthishouseoccupiedbymyparentwouldbe Income:NIL PropertyTax=5000andmaintcharges:12000 Totalloss:17000Rs DearGana, Yes(assumingyoudonothavehomeloanonit). Thereisnocolumntocapturethismonthlyexpenses.Justincludewithpropertytax? Hellosreekant IhaveahouseinanothercityAonwhichhereisahouselanbutwhichisneitheroccupiednorletout. IncityB,IhaveanotherhouseonwhichIhavetakenloanwhichIproposetoletout. IampresentlystayingincityB,inacompanyallowedresidenceduetomybetterhousingfacilitybutduetothesame,IdonotearnanyHRA. WhataretheimplicationsoftaxandwhatbenifitsofdeductioncanIclaim Regards DearN.Rao, YoucandeclareboththehousesasLet-outproperty orhousewithalowerhomeloanoustandingamountasSOPandanotheroneasLet-out. IfyoutreatCityApropertyasLet-outthenthe‘rentalincome’isNILbutyoucanclaimtheinterestpaymentsastaxbenefits(noceilinglimit). Read:Incomefromhouseproperty&incometaxbenefitsonhomeloan. Sir, IandmysonhaveapropertyinPuneandanotherpropertyatBengaluru.Ineachproperty,Ioweshareof50%andmysonhas50%share.IstayinPuneinourownpropertyandmysonstaysatBengaluruinourownproperty.InmyITreturnIcannotshowbothpropertiesasselfoccupiedasthereisnosuchprovisionintheScheduleofHousepropertytoshow2hosesasselfoccupied.InsuchcasehowIshouldfillthescheduleofhouseproperty? 2)IncasemysonletsoutthepropertyofBengaluruandshiftstoarentedhouseinthesamecityhavinghigherrentthantherentedhousethenhowwillbethetaxliability? ThanksandRegards. Suresh DearSuresh, 1–YouhavetoshowonepropertyasSOPandanotheroneasLet-out(atnominalrentalvalue). 2–HemayshowthepunepropertyasSOPandtheblrpropertyaslet-outoneinsuchacasebutthisagainshouldbebasedonthequantumofactualtaxbenefitsyouwouldgetintwoscenarios.KindlytakehelpofaCA. Hi, Pleasecanyouadvisehowshouldifilemyreturnsforpropertiesasdetailedbelow. 1)Flat#1(fullyownedbyme)isnotrentedoutoroccupiedbymyself. 2)Flat#2(jointlyownedwithmybrother).Iwaslivinginitfor5monthsbeforeirenteditouttosomeoneforrestofthefinancialyear.Idonotpayanyrentforittomybrotherorsharetherentalincomewithmybrother. 3)Flat#3(jointlyownedbymybrother).Brotherislivinginit.Heisnotdependentonme.Hedoesnotpaymeanysortofrentforit. Q1)IhadmovedtoarentedapartmentinsamecitywhereiownFlat#2andhaveclaimedHRAforthesame.IsthispermissibleasperITlaws? Q2)Willallofmy3propertiesbedeclaredaslet-out/deemedlet-out? Q3)IsitnecessarythatonepropertymustbeSelfoccupiedifmultiplepropertiesareowned? Q4)CaniclaimloaninterestdeductionforFlat#1? Q5)ForFlat#2and#3,homeloanisonmynamewhilemybrotherissimplyco-applicant.Caniclaiminterestdeductionforbothoftheseflats? Q6)Ifflat#3isdeclaredaslet-out,doihavetomentionanotionalrentwhilefilingreturnsforit? Thanksinadvance! Regards, Paresh DearParesh, 1–Itispossibleandacceptable,providedyoucanjustifyyourcase.(Forexample:Flat2canbeveryfarfromyourworkinglocationandyoucantakeahouseonrent). 2–IbelievethatFlat1isSOP. 3–Ibelievethatitisnotmandatory. 4–Yes. 5–Ideallybothofyourhavetoclaimtaxbenefits.AreEMIspaidfromjointbankaccount? 6–Yes. ThankyouSreekanthforyourreply. Herearemyfurthercomments. 2-WhywouldFlat1beSOP?Itsnotrentedoutoroccupiedbyme/family. 5-Weuseourownaccounts(notjoint)topayEMI.Doesitmakeanydifference? Thanksagain! DearParesh, Flat1–Whereisit(inyournative)?Isitvacantnow?Isitoccupiedbyyourparents? Flat1isatmynativeplacebutitisvacantandnotoccupiedbyanyone. Flat#1and#3areatmynativeplace. Flat#2isincitywhereI’mcurrentlyemployed. ShouldIdeclareFlat#3asSOP? DearParesh, Yoursituationisverytricky.SuggestyoutotakehelpofaCAinthismatter. Iamstayinginaself-occupiedhouseandIamclaimingtaxdeduction,fortheinterestIpaytowardsloanrepayment.However,Ihavealsostartedahouseconstruction,whichisnotcompletedandIhavetakenasecondloanforthesame.CanIclaimtaxbenefitontheinterestofthesecondhousealso,whichisunderconstructionandisnotyetlet-out? Regards Sudeep DearSudeep..Kindlyreadthisarticle:Under-constructionproperty&Incometaxbenefitsonhomeloan. Thankyou,Sreekanth. sir, IhavesomeconfusionregardinghomeloanEMIandIT.Iamplacingitonebyone. 1.whatisnotselfoccupiedproperty?IhaveaflatatKolkatatakenbyHBL&I’mstaying300kmapartfromKolkataforjob.TheflatatKolkataisnotinrent.canitbetreatedasselfoccupiedornonselfoccupied?EMIisgoingon. 2.Aspersection24ofITinterest[max2L]isdeductiblefromincomeaspayablebasis[i.e.accrualbasis¬paidbasisunlikeprincipalpayment].LoantakenfromSBIinfloatinginterest.NowwhatshouldIgivein2016-17ITdeclarationinsection24column(asrateofinterestmaybechangedanytimeinfuture). 3.IfIpayalumpsummoneyaspartialprepaymentofloanthenpayableinterestamount[forsec24]willbechangedorremainsameasbefore[ifIdon’tmakeanyprepayment]. 4.IninitialEMIbankusedtotakelargeportionasinterest&lessportionasprincipal.IncaseofprepaymentbankwillcontinuesameamountofEMI&loanwilltenuredecrease.whatwillbeeffectoninterestpart? canIclaimawrittenreportfrombankineveryyearorattheendofloanshowingchangeofamount[ifany]ininterest. 5.whatismoreprofitableconsideringbankinterest&incometax,prepaymentorlongtermEMI Plshelpmeassoonaspossible.Thanks. Dearsubhro, 1–Ifyourhometownpropertyislyingvacant,youcantreatitasSOP.IfyouaregettingHRA,youcanclaimitbesidesincometaxbenefitsonyourhomeloan(ceilinglimitapplicable). 2–ThetotalinterestpaidbyyouinaFinancialYearcanbetakenfromyourLoanStatementprovidedbyyourlender/banker. 3–Whenyoupre-paysomeamounttowardsprincipal,yourbankerwillgenerallyreducetheLoanTermsoyourEMIsmayremainsame.HoweveryoucanaskyourbanktokeepthetermsameandpaylessEMIs. 4–ThisiscalledasAmortizationschedule.YourEMIhastwocomponentsi)Interest&ii)Principal.Duringtheintitialstages,interestcomponentishigher.Asthetenuregoesby,PrincipalcomponentincreasesthusleadingtoZEROLOANOUTSTANDING.Yesyoucangetloanstatement. ThanxSreekanthforguidingmeinproperway.Thenplstellmewhatisnonselfoccupiedproperty?IfIbuyanotherpropertythenwillitbenonselfoccupied?InITrulesinoneplaceitissayingnodeductionforinterestinsecondHBL.Onlyprincipalpaidisexemptedfromtaxableincome(80C)&asperSec24:thereisnoupperlimitforHBLinterestofNon-SOP.Ican’tgettheexactmeaning. Moreover,declarationshouldbegivenfornextFYi.e.2016-17.BankcangivestatementforFY2015-16.ButinterestfortheFY2016-17canIget?[becausebothwillnotbethesameIthink] MylastqueryregardingprepaymentorlongtermEMIcontinuing,whatdoyouthinkprofitableconsideringITaspectaswellasbankinterest[at5thpointofpreviousmail] Plshelpme. Regards, SUBHRO DearSubhro, IfyouowntwopropertiesthenyouhavethechoicetodeclareanyonepropertyasSOPandtheotheroneasLET-outone(basedonwhichisbeneficialtoyou). Onalet-outproperty,theentireinterestpaymentscanbeclaimedastaxdeductionundersection24. Kindlyread:Incomefromhouseproperty&taximplications. Pre-paymentorcontinuation,itdependsonmanyfactors:Yourotherfinancialgoals,incomelevel,yoursavingsrate,current&futurehomeloaninterestratescenarioetc., NiceblogSreekanth. Ihavetwohouseproperties.OneisrentedoutandtheotheroneIamstayingin.Bothhavehomeloans.TheoneinwhichIstayhashigherinterestpaidonthehomeloan.CanIdeclaretherentedoutpropertyasselfoccupiedandthisoneas“deemedtoletout”property? Dearsanjiv..Yes,itisyourchoice. SirIhaveaqueryregardinghouseproperty.Iamagovtemployeeandpresentlystayinginanotherstateinarentedhouse.Ihaveahousebackatmynativeplace,whichispresentlyoccupiedmyrelatives.SirinmyITRIhaveshownthatpropertyasLetoutandIhavealsoincurredanegativeincomeofrs140000fromit.MyqueryisshouldIrectifymyITRandshowitasaSelfoccupiedpropertyoritisalrighttotreatisasasLetoutpropertyasIamnotoccupyingitneitherIamgaininganyprofitfromitasmyrelativesareoccupyingit Dearvivek, YoumayshowitasLet-outproperty.Kindlyinclude‘rentalincome’alsowhilecalculating‘incomefromhouseproperty‘. KindlynotethatyoucanalsoclaimHRA(ifany). Hi! Ihaveauniquequery. Ihavearesidentialpropertyonwhichthereisahomeloan.TheMunicipalAuthorityhasdeclaredthestreetonwhichthepropertyissituatedasvalidforCommercialuseafterpaymentofaConversionCharge.Irunabusiness(proprietorship)outofthepropertyforpasttwoyears.Canitaketheinterestpaidonhomeloanasexpenseinmyproprietorshipbusiness?? IhavevariousGovt&Exciseregistrationsonthesameproperty. Thanks&Regards, JitenderSingh DearJitender..Haveyoualsoself-occupiedtheproperty?IbelievethatyoucanclaimitunderSection24(ifitisaLet-outproperty). Hello, Ihavetwohouse,bothinGreaterNoida. HouseAwaspurchasedin2006(throughHomeLoan),butgotpossessiononlyinMay2016.NowIamplanningtorentitout.Pendinghomeloanoutstandingis8Lakh.HomeloaninterestforcurrentyearisRs.80Thousand HouseBwaspurchasedin2011(throughanotherhomeloan)andgotpossessioninthesameyear.Iamlivinginthishome.Pendingloanoutstandingis25L.HomeloaninterestforcurrentyearisRs.2.5L ForHouseA,from2006to2016(consideredasconstructionperiod),Ipaidaround20Lakhashomeloaninterest. Soquestionis: CanIconsideredHouseBasself-occupiedpropertyandclaim2LInterestbenefitandalso CanIconsiderHouseAasLetOutPropertyandclaimRs.80thousandasinterestratebenefitandalso20Lin5instalmentsinnext5years. Sototalinterestclaimbenefitinayearwouldbe 2L–HouseB+ 80K–HouseA+ 5L–HouseA(underconstructionperiod) =7.8L–overall Iwillalsoshowtherentasmyincomefromletoutpropertyi.e.HouseA. Pleaseguideme.Pleasecorrectme.Pleasesuggestthebestoptionforme. Thanksinadvanceforyoursupport Regards Manoj Pleasehelp.IamaskingthisquestionforFY2016-17 DearManoj, Yourunderstanding&analysisisright. ThanksalotSreekanth!! Youareagreathelp. Godblessyou. HiSreekanth, Veryinformativepost.Thankyou.It’salsoimpressivethatyouarereplyingindetailtocommentsaswell.Kudos! Ihadaquickquestion. Ihavetwohomes; 1.Iamoccupyingoneandhavealoanonit. 2.Theotheroneislyingvacant(mightsellorrentitout;noideayet)andIclosedtheloanonthat. Iamconfusedabouttheinterestdeductionsandpartwhereitsayswecandecidewhichisselfoccupied. CanIconsiderHouse1asselfoccupiedanddeducttheinterestinfullagainstHouse2consideringanotionalrentincomeonthat?ordoesthelawrequirebothhousestohavealoanonit? ThanksSreekanth! DearGeorge, Asthehouse(2nd)doesnothavehomeloanonitandnorentalincomethenitisbettertodeclarehouse1asSOPandclaimincometaxdeductionsonhomeloan. Hadthishousehadhomeloan(ifhigheroutstandingamount)thenyoucouldconsiderthisaslet-outandclaimentireinterestpaymentsu/s24. DearSreekanth, Thanksforthequickreply. IfIhavetwohouses,canIclaimtheentireinterestasadeductionconsideringanotionalrentalincomeordoIneedtohavehomeloansonbothhousestoavailthat? That’swhat’sbeenconfusingme. Sobasicallyonehousewithnoloanandanotherwithloan.CaniclaimentireinterestoramIlimitedtoRs2Llimit. ThanksSreekanth! George DearGeorge, Withouthavingahomeloanonaproperty,howcanoneclaimtaxbenefitsoninterestpaymentsonthesaidproperty? ThepropertywhichisSelf-occupiedandhaveloanthenyoucanclaimuptoRs2Lakhonlyu/s24. IhaveonepropertyinKerala(vacant)andIamlivinginMumbaiwithmyparentsinaflatforwhichIampayingrentandalsopayingintonloanof1stpropertysoIwanttoknowthatwhether1stprop.isdeemedletoutorsop? DearRahul..IbelieveyouhavetodeclareitasSOP. IAMARETIREDPERSONRECEIVINGPENSIONANDLIVINGINMYOWNHOUSEWHETHERIMAYGETANYRELIEFFORHOUSERENT DearTHAKURDAS..Ifyouarenotpayinganyrentthennoreliefassuchisavailable. Kindlyread:ListofIncomeTaxDeductionsforFY2016-17. HiSreekanth, IfanemployeeleavestheorganisationinJuneandprovidestheinvestmentproofof2lacstowardsLossonhouseproperty-SelfOccupied.Shouldthecompanyconsidertheentire2lacsfortaxexemptfortheyshouldconsideronly3months(Apr,May&June) Thanks.. DearAamer, IdeallytheymayconsiderforentireFYandaccordinglycancalculateyourtaxliability. However,whenyoutheemployeejoinsanewcompany,he/shehastoupdateaboutthistothenewemployertoo. Read:IncomeTaxDeclaration&InvestmentProofs.. HiSreekanth, Canyoupleasehelpmewithmyquestions? Thanks.. DearAamer..KindlynotethatIhavealreadyrepliedtoyourquerydated13-May-2016. I(individual,noco-applicant)haveahouseinmynamewithoutanyhomeloan.Nowmeandmywifeareplanningtoinvestbybuyingasecondhomewithhelpofhomeloan.Soiguessinthiscaseitwillbetreatedassecondhomeformeandfirsthomeformywife. 1.Soiandwifewillbeabletoclaim50%ofinterestfortaxexemptionunder8oEE. 2.Wifewouldbeabletoclaim50%ofprincipalunder80c. Ismyunderstandingright? DearJon, 1–80EEandalsoundersection24. Read: Incomefromhouseproperty&Incometaxbenefits. ListofIncometaxdeductionsforFY2016-17. 2–Yes. Hi, IamManojfromMumbai.Iamstayingwithmyparentsandpayingrenttothem.CaniclaimHRAonthis? Butiamthefirstholderandmyfatherissecondholderinthishouse.Ihavealsocompletedhomeloanonthis. Pleaseadvice. DearManoj, IbelievethatyoumaynotbeeligibletoclaimHRAasyouaretheco-ownerofthepropertyanditisself-occupied. Hi,IhaveapropertyinBLRwhichisrentedoutandnoloanforthisproperty.Ihavebeenshwoingrentalincomeandpayingtaxforthesame.IhavebookedanotherpropoertyinGurgaonwhereIlivein2012andIgotpossessionletterlastnov2015.Ihavenotrenteditoutasthewoodworkisgoingon.IamstayinginGurgaoninrentedhouse.Ihavetocalimtheinterestpaidforthelast3yearsin5equalinstallmentandtheinterestfor2016-17.CanIclaimtheentireinterestasthehouseisneitherrentednorselfoccupiedatpresent.AlsoifIoccupy,isthereanylimitforclaimingtheinterestfrom2012-2015 DearRajan, Whenwastheloandisbursed? Kindlyread: Under-constructionproperty&Taximplications. Incomefromhouseproperty&homeloantaxbenefits. HI, IwasbuyahomeAPR-2015andtakeahomeloanwithmyownname(onlymynameinagreementandhomeloan)andHomeloanonlymyself,AftersomemonthIammarriedJAN-2016(mywifeisworking)Nowiwantaddmywifenamebankloan(50%)soicantakebenefitinTaxlikeunderPrinciple(80c-3lakh,)andInterest(24-B-4lakh)…whatcanidoforthisscenario..becauseultimatelyafteramarriagewifewillbe50%ownershipeithernameisthereornotinagreement.Pleasereply Reply DearRishi, YoucanmakeaGiftdeed(mentioningtheownershipshareinyourspouse’sname)&thencanaskyourbankertoaddherasaco-borrowerofyourhomeloan. Read:OptionsforaddingSpouse’snameasco-owneroftheProperty. Thestampdutyisgenerally2%ofthevalueoftheproperty,alongwith1%registrationcharge. ihavealreadypaythosethingwhyiwillpayagain Hi, Ihaveahouseindelhi,andl(Jointloan)loanonthehousewillbecompleted.ItisshownasSOP,myparentsindelhiuseitandIuseitwheneverIvisitdelhi. IamplanningtobuysecondhouseinBangaloreandtakeuploanonthehouse.WorkinginBangalorecurrently. question:- >AsIhaveonlyonehouseonhomeloannow,CanIshowBangalorehouseasLetoutevenwhenworkinginBangaloreanddelhihouseasSOPasusedbyparents? >DoIhavetopaywealthtaxonsecondhouseinBangaloreorwealthtaxonfirsthouseinDelhi?ISthisonetimeoreveryyear?Whatistax?Anyothertaximplications? >Incaseofletout,interestbenefitonthetotalamountcanbeclaimedbybothpartnersor50%each? >incaseofletout,Ihavetoshowotherincomefromproperty(rent)?Minimumrentamountcanbeshownandtaxletoutinteresttaxbenefit? Dearmukul, 1–WhenapersonownstwoSOPproperties,he/shehasachoicetoshowoneasLet-out.YoucanshowDelhihouseasSOP(parentsresiding)andtheBlrpropertyasLet-out.ButareyougoingtoclaimHRA? 2–WealthTaxhasbeenabolishedfrom1stApril,2015. 3–Iftheotherco-borrowerisalsoaco-ownerofthepropertythenYES.Read:Jointhome-loan&Taximplications. 4–Read:Incomefromhouseproperty&Homeloantaxbenefits. IdonotplantoclaimHRA.OnlywanttoshowdelhihouseassopandBangaloreasletoutforinterestpurpose. Showingletout,Ihavetoshowotherincomesourcefromhouse? Also,IhavetoIindicatestayinginrenthouseandclaimhra? Dearmukul, Aspertaxlaw,youcanfollowthepointsasdiscussedinourpreviouscomment. Butpractically,youremployermightaskyourabout‘residentialaddress’etc.,So,youmayhavetomanagethat. Hi, Hopeyou’redoingwell. MynamehisMohammedFaheemfromHyderabadandmyHRAis3705P.MTotal44,460P.A.Istayalongwithparentsinonehousewhichbelongstomyfatherandthattonotregisteronhim.It’sonthenameofmygrandfather.IsthereanypossibilitiestoclaimHRAexemptionasperITrules?Canweshowrentpaidtoparents/spouse.IfthatissowhatIhavetodo.Howtoclaimthatpleaseadvise. Thanksinadvance. Regards, MohammadFaheem DearMohammed, Yes,youcanpayrenttoyourparentsandgettherentreceiptfromthem.Also,yourfatherhastoshowthisinhisITR(ifataxassessee)asrentalincome. Ihavetakencompanyhomeloanwhereinterestislowerthenthemarketrate.WhetherInterestsubsidyreceivedonitisataxableperquisite DearDiwakar..Ibelievethatyoucanclaimthetaxdeductionsu/s80candu/s24aswell. HiSreekanth, IamcurrentlylivinginBangaloreandhavepurchasedapropertyhereforwhichIampayingpre-EMI(actualemishavenotstartedandconstructionisstillgoingon).Ihavepurchasedapropertyinmyhometown(notBangalore)forwhichmybrotheristhejointownerandco-borrowerofloanandforthispropertyIampayingEMIsandmyparentsarelivinginthisproperty. WhatkindoftaxdeductionsIcanexpect? DearGaurav, Kindlygothroughallthesearticles&reverttomeifyoustillneedclarification; Incomefromhouseproperty&taximplications. Jointhomeloan&taximplications. Underconstructionproperty&homeloantaxbenefits. ThanksSreekanth,thesearereallygoodblogs.OnequestionIstillhavethatconsideringmyhomeinmyhometownassecondhome,Icanclaimtaxdeductionontheinterestpaid.ThequestioniscanIsaythatmyrentalincomeinnil(asmyparentarestayingthere).Willgiveyoudetaileddata: –TotalInterestpaidinfinancialyear15-16isRs130000 –AsIamco-ownerof50%part,myinterestportionwillbeRs65000 –Rentalincome–nil CanIclaimtaxdeductiononentire65000undersection24(b)orshouldIstillneedtoshowsomerentalincomeandreducethatamountfrom65000? DearGaurav, Astheblrpropertyisstillunderconstruction,youcanconsiderthehometownpropertyasSOP(asyourparentsarelivingthere). Hi, Iownajointpropertywithmyparentsbutliveinothercityduetomyjobrequirementsinrentedproperty,myparentsliveintheownedproperty.Ihave2questionstothissubject; 1)IseethatyouwritethatwecanclaimexemptiononHRAiflivingonarentedproperty.(uptowhatvalue?) 2)CanIclaimthePropertyTaxpaidtotheMunicipalityformyownedpropertyunderIncomeTaxrebateasthisisalsoataxthatIampayingtothegovernment? Thanks,Deven DearDeven, 1–ClickheretoknowaboutHRAcalculation&exemptionlimit. 2–Yes,youcandeductthisfromthe‘incomefromhouseproperty’.Read:UnderstandingTaxImplicationsofIncomefromHouse/Property Pleasereferourearlierconversation ThankYouverymuchSir. 1.CantIfilereturnfortheAY2015-16nowandclaimremainingportionof1Lakhunder80EE.????? 2.AsyousaidforVacantflatorselfoccupied,themaxrebatethatIcanisfor2Lakhsofinterestpaid,undersection24. WhatifIletoutmyproperty….Icangetunlimitedrebatefortheinterestpaidundersection24???? ImeanIdontunderstandthelogicbehindit,becauseontheonehandIamgettingextrabenefitfolettingoutmypropertyandontheotherhandIwillhaverentalincomealso. WhytheseextrabenefitsforletoutpropertiesascomparedtoSOP?????Justforcuriosity. Regards Vikas DearVikas..SuggestyoutokindlyconsultaCAinthismatter. HelloSir, Kindlyclarifymetheissue.IwasworkingatDelhiandhavingflat.DuringAug2015,IhavebeentransferredtoHyderabad.NowmyDelhiflatisvacant.InOct2015,IpurchasedanotherflatatHyderabad,inwhichIshiftedinFeb2016.FromAug15toFeb16IwasstayinginrentedaccommodationatHyderabad. 1.WhetherIcanshowDelhiproperty,whichisvacant,asSelfOccupiedandHyderabadProperty,whichishavinglowrentalvalue,asdeemedletout. 2.WhetherIcanclaimHRArebatefortheperiodAug2015toFeb2016,theperiodduringwhichIwasstayinginrentedaccommodationatHyderabad. DearSeshasai, 1–Yes.Ifapersonhas2houses,hecanchoosetoindicateonehouseasselfoccupiedandtheotheras‘deemedlet-out’. 2–YesyoucanclaimHRAforthesaidperiod. HelloSir,Pleasehelpmewiththis. Weliveinahouseownedbymymotherandfatherinjointownershipsince1999.Recentlywetookaloanforhouserenovationwork.thecapfordeductionu/s24bforrenovationislimitedto30000andnot200000,right? forthepurposeofrenovationwearecurrentlylivinginarentedhouseinthesamecolony.MydadbeingasalariedemployeegetsHRA. CanweclaimbothexemptioninHRAu/s10(13A)andinterestdeductionu/s24b?andthehouseinwhichrenovationisbeingdonewouldbetreatedasselfoccupied? DearAyush, Ibelievethatyourfathercanclaimboth(HRA&24bdeduction). Wouldthehouseinwhichworkisbeingdonewouldbeconsideredselfoccupiedordeemedletout? DearAyush..YoucanconsideritasSelfoccupiedpropertykeptvacant. DearSir IownaflatforwhichpossessionletterwasgiveninthemonthofMAY-2015.ItookHomeloanofRs.25Lakh(firsttimebuyer)inthemonthofSEP2013. Homeloaninterest&principlefordifferentFYisasfollows: FY-2013-14-INT-Rs.78,215&PRIN-46,320 FY2014-15-INT-Rs.1,95,785&PRIN-1,03,099 FY2015-16-INT-2,23,459&PRIN-70,181 TAXbenefitclaimedtilldate FY2013-14-NIL(asnotpossessed) FY2014-15-claimRs.74000under80EE(1LakhExtrataxbenefitoninterestwhichcouldclaimedintwoyears). Iclaimedthisastotalinteresttilldatewas2,74000.Ididntclaim200000undersection24aspossessionwasnotgivenbutoverthatwhich74000Iclaimedsincethiswasextrabenefitavailableonlyfortwoyearsandtherewasnonecessityofpossessionforapplyingthis. FY2015-16–Ineedtoapply. Question: 1.whetherwhatIdidforFY2014-15wascorrectornot. 2.AsmyflatwasvacantthroughouttheyearFY2015-16,whethertaxlimitwouldbe2Lakhorunlimited 3.Ifitislimitedto2Lakh,HowwouldIclaiminterestspaidinpreviousyears(inmycase2lakhsisleft),asthisyear’sisalreadymorethan2Lakhsi.e.2,23,459. Kindlyhelp Regards VikasKumarJha DearVikas, 2014-15:IbelievethatSection80EE,deductionontheHomeLoanInterestpaidbyyouisvalidforfinancialyears2013-14&2014-15(Assessmentyear2014-15and2015-16)only.AlsowhyisthatyouhaveclaimedonlyRs74k? 2015-16: 1–Yes.Referabovepointtoo. 2–YoumeantosaythatyoukeptyourpropertyvacantfromMay2015tilldate?Ifthepropertywasnotlet-outforanypartoftheyear,youhavetodeclareitas‘Selfoccupiedpropertykeptvacant’.(Whatisthereasonforkeepingitvacant?) 3–IfyoudeclareitasSOP,theextrainterestamountshavetobeforgone. DearSir Thanksforyourpromptreply 80EE:WhatIunderstoodfromthebudgetpresentedByShriPChindambaramfortheyear2013-14,wasthat80EE(1Lakh)istheextraamountwhichcanbeclaimedonlyifinterestexceeds1.5Lakh(atthattimeinterestlimitwas1.5Lakh)andtheamountwouldbeoverandabove1.5Lakh. Foeexampleifinterestis2LakhIcouldclaim50Kunder80EEandifinterstissay50KIcantclaimanyamountunder80EE.ThisiswhatIunderstood. NowforFY2013-14-interestwas78214<1.5Lakh,soIdidntclaimanythingunder80EE.Also,sinceidintgetthepossessionIdintclaiminterestalsoundersection24. ForFY2014-15myinterestwas1,95,785andaddingpreviousyearinterestitbecame2,74,000.SinceIdidntgetpossessionatthatalso,Ididntclaim 2Lakhundersection24(Limitwasexceededto2Lakhinnewlyannouncedbudget).Buttheextraamount74Kover&above2LakhIclaimedunder80EE,astherewasnorestrictionofpossessionforclaimingunder80EE. Whetherwhatididwasright???? ShouldIhavebeenclaimedfor1Lakh(maxextraamount)or2Lkha(fortwoyears) IfsuchthingIshouldhavedone,thenpleaseadvice,cantIfilereturnforthoseyearnow. 2.IgotpossessioninMAY-2015andfromthattimeitisvacant,asIamworkinginsomeotherplace. TotalaccumulatedinterestuptoFY2014-15is2LakhwhichIdidntclaimedlastyear andthisyearinterestis2,23,459. PleaseHowmuchinterestIcanclaimfortaxrebate. Regards DearVikas, Section80EEisapplicableforSelf-occupiedpropertiesonly,whichaportionofthedeductionhavealreadybeenclaimed.IbelievethatyoucouldhaveclaimedRs1Lakhu/s80ee. Assesseecantakedeductionu/s80EEoninterestpayableonhomeloanupto1LakhinA.Y.2014-15.Itcanclaimdeductionintwoassessmentsyear.Meansifwholeamountofinterestpayableupto1lakhisnotclaimasdeductioninA.Y.2014-15thenremainingbalanceamountupto1lakhcanclaiminA.Y.2015-16.Totaldeductionunderthissectionshallnotbemorethan1lakh. So,inthisAY2016-17,themaximumlimityoucanclaimisRs2Lu/s24. ThankYouverymuchSir. 1.CantIfilereturnfortheAY2015-16nowandclaimremainingportionof1Lakhunder80EE.????? 2.AsyousaidforVacantflatorselfoccupied,themaxrebatethatIcanisfor2Lakhsofinterestpaid,undersection24. WhatifIletoutmyproperty….Icangetunlimitedrebatefortheinterestpaidundersection24???? ImeanIdontunderstandthelogicbehindit,becauseontheonehandIamgettingextrabenefitfolettingoutmypropertyandontheotherhandIwillhaverentalincomealso. WhytheseextrabenefitsforletoutpropertiesascomparedtoSOP?????Justforcuriosity. Regards Vikas ThankYouverymuch Sir, 1.CantIfilereturnnowfortheAY2015-16fortheremainingportionofthe1Lakhundersection80EE. 2.Asyousaidmaxlimitfortaxrebateforselfoccupiedorvacantflatis2Lakh. WhatifIletletoutmyflat,Iwillgetunlimitedrebateforinterestpaidundersection24.ImeanIdontunderstandthelogicbehindthis,OnthehandIwillgetextrataxbenefitbylettingouttheproperty,andontheotherhandIwillalsogetrentalincome. JustforcuriositymayIknow,whysuchextrabenefitstopersonwholetouthisproperty,andnoextrabenefitforthatpersonwhocantliveinhisownhouseasheisworkinginsomeotherplaceandduetosomereasoncouldnotgivehishouseonrent. Regards VikasKumarJha Hi,Ihavestayedinmyrentalhousetill31-Aug-15andthenmovedtomyownflaton01-Sep-15.From01-Apr-15to30-Apr-15Ihadrentedouttheflat. SoIclaimedHRAbenefitfromApr15toAug15andalsoHousingloanPrincipal+InterestonloanunderSelfoccupiedpropertyandunderLetout,Ideclared1monthrentasincomeandthenmuncipaltaxpaid+30%ofrentcollectedasmaintenancecharge. HoweverduringverificationfromHewitt,theyapprovedHRAportion+PrincpalpaidunderSelfoccupied+Muncipaltax+maintenanceunderLetouthowevertheydidnotapproveinterestpais(~2.5lakhs)underSelfoccupied.SoIwillbeloosingthetaxamountoninterestpaidnow.IhavenotdeclaredPrincipal+InterestthisunderLetoutsection. SopleaseadvisehowIcanaccountthisinterestpaidfortaxexcemptionnow. Regards Rajesh DearRajesh..Isoneportionofyourhousebeingself-occupiedpartly&otherportionlet-out? DearSrikanth, IownahouseinBangalore,whichisajointpropertywithmywife.Iamplanningtobuy02moreflatsinDelhitowardsinvestmentpurposes.IhadloanonmyfirstflatinBangalorewhichisoverandIwouldbetakingloanonothertwopropertiesnow.Myqueryis,whetherIwillbeabletotaketaxbenefitononeofthepropertyindelhiasSOP,takingtaxexemptionforprincipleandinterestpaid(upto2L)andnotshowinganyrentalincomeandotherpropertyasrentoutindelhibyshowingrentalincomeandtakingtaxbenefittowardsinterestpaid.Pleaseadvice. DearJatin, Asperthetaxationlaws,ifyouhavemultipleproperties,youhavetheoptiontochoseanyoneasSelf-OccupiedpropertyandtheremainingpropertiescanbedeclaredasLet-outorDeemedtobelet-outproperties. ThanksforyourpromptresponseSreekanth,Ireallyappreciateyourhelptowardsansweringthequerieshere. Iwouldliketobemoreclearhere,whetherIcanconsidermyonepropertyinDelhiasSOPandsecondpropertyinDelhiasLetout,whereasIownapropertyinBangaloreandnotclaiminganyexemptionunderHRAorselfpropertybenefitsonBangaloreproperty.Only02benefitsbothonDelhiproperties(SOP&Letoutbenefits).IwillbestayinginmyBangaloreproperty. Regards.. DearJatin, Also,yourBangalorepropertyhastobedeclaredas‘letout’or‘deemedtobelet-outone’andcalculateyour‘incomefromhouseproperty’accordingly. Kindlyread:‘Incomefromhouseproperty&taximplications’. Inthissituation,ithinkthebetteroptionwouldbetokeepmyBangalorehomeasSOPandclaimITbenefitsonother02propertiesasLetoutproperties.CanIclaiminterestpaidtowardsbothloansintotal? DearJatin..Yes,itsagoodoption. HiSir, Implanningtoshiftintherentedhousenearbymyson’sschoolinbangaloreandIwillputmyownonrent,whichisquitedistantfrommyson’sschool.Ihaveclosedthehomeloanofmyflat.Iwillbegetting16000asrentandwillbepaying23000asrent.Guidemehowitwillworkoutconsideringincometaxinmind. Regards, Rajni DearRajni, YoucanclaimHRA(ifany)andalsohavetoshowyourrentalincomewhilecalculating‘incomefromyourproperty’. Read:Houseproperty&Incometaximplications. ThanksSreekanthforthepromptreply. Iwentthroughthelinkandfounditsveryuseful.ButstillIhavefewdoubts,whichIrequestyoutohelpmetounderstand. Yearlyrentformyletoutproperty-30%ofdeductionis134400(16000/pm-30%),whereasIwillbepaying276000(@23000/pm).MyBasicsalaryis360000,so50%ofthebasic salaryIarrivedat180000.SoconsideringtheoverallscenarioIwillbepaying45600more(180000-134400). WillIgetthisbenefitunderHRAforpayingthisextramoneyintherent. AlsowanttoknowisthereanywaywhereIcangiftmyrentdirectlytomywifeorcanImakeanyagreementwithmywifeandtenant. Pleaseshareyourguidanceandhelpme! DearRajni, YouneedtocalculatethetaxexemptedHRAseparately.Clickheretocalculate.. ThearrivedamountistaxexemptedandcanbedeductedfromyourGrosssalary. Thecalculationofyourincomefromhousepropertyisadifferentone(ascalculatedbyyou). (ifthehouseyouboughtandthehouseyouliveinareinthesamecity,youshouldhaveagenuinereasonfornotlivinginthehousethatyouown.Youmayneedtoprovidethenecessaryexplanationstoyouremployer,ortheincometaxauthorityincasethereisascrutinyofthedetailsthatyouhaveprovided.) ThanksSreekanthforthedetailreply. AlsowanttoknowisthereanywaywhereIcangiftmyrentamountdirectlytomywifeorcanImakeanyrentalagreementbetweenmywifeandtenant.Iamthesoleownerofthehouse.MywifeisholdingthePANcardandnotworking.Socanwesavetaxthisway? Pleaseadvise. Rajni DearRajni, Asthepropertyissolelyownedbyyou,therentalincomeshouldbeshownbyyouonlyinyourITR. Ifapersondecidestogiftacertainamounttohisspouse,orminorchildrenthenanyincomeearnedbytherecipientonitshallbeclubbedwiththeincomeofdonor(you). Read:Gifts&Taximplications. YoumayaddhernameinthesaledeedbymakingaGiftdeedandmentionacertainpercentageofthepropertyinhername(ownershipratios).Therentalincomecanthenbeclaimedaspertheownershipratio. Read: Optionstoincludespouse’snameasco-owneroftheproperty. ThanksalotSreekanthforclearingallthedoubts. Thanksforthegreatarticle,veryinformative!! Ihaveaquestionaboutinvestingmoneyinmyparentsname.Pleasehelptoclarifyfollowingquestions; 1.)IfIinvestmoneyinmyparentsname,myparentswillbeliabletopaytaxontheincomethatgetsgenerated.Iwouldnotneedtopayanytax,right 2.)Myparentscananytimegivethatmoneybacktomeanditwouldnotattractanytax,right. 3.)Iinvest30000permonthinmyfathersnameandsameamountinmymothersname.Iamcurrentlydoingthisincash.Ihavecreatedagiftdeedonaplainpaperindicatingtheamountprovidedtoparentsinafinancialyear.Myatmtransactionsalsoshowtherequiredcashwithdrawl.Doyouthinkitsfineapproach. Pleaseshareyoursuggestions. Dearrohit, 1–Yes. 2–Yes.(Agiftisgenerallynotreturned.Soyoucanconsiderthisamountasadifferentone.Elseitcanbeviewedasreturnofborrowedmoneyieloan). 3–Legally(fromtaxationviewpoint),itisfine.KindlynotethatyourparentsmayhavetofileITRs(ifrequired). Thankssreekanthfortheanswers Youmakecomlpexthingssoundsosimple 2.)For#2,whatisyoursuggestiononhandlingthis.Cannotafathersimplygivehismoneytohissonorwhatisthecorrectwordingormechanismtoshowhere. 3.)MyfatherdoesfileITRbutmymotherhasnosourceofincomebutonlytheinterestincomegeneratedfromtheinvestingthegiftmoney.SomymotherhasverylowincomelevelsandhenceshedoesntfileanITR.Thisisfine,right!! Thanks!! IsitpossiblethatIcantakeyourfinancialservicesaswell(adviseonphoneetc.) DearRohit, 2–Canofdifferentamounts.Lethimalsomaintainarecordofthesetransactions. Ihaverecentlystoppedprovidingone-to-oneFinancialplanningservices.Youmaykindlyleaveyourquerieshere(blog),willsurelytrytoanswerthemASAP. ThanksSreekanth..Reallyappreciateyourhelp!! 2.)on#2,MyfatherhasaRDinbankwiththecashthatItransfertohim.NowwhentheseRDsmature,thismaturedamountisusedtopaymyhomeloans.Sothisshouldbefine,correct.. DearRohit..Looksoktome.Butifyourbankerasksforthesourceofincomewhilerepayingorpart-repaymentofyourhome-loan,youmayhavetoproducetheGiftDeeds.KindlycheckaboutthiswithaCAtoo🙂 Hi Iowntwoflats.Mywifeisjointownerfortheseflats.Ihavenotclaimedanydeductionunderhomeloanfortheseproperties.Now,Ihavegotthepossessionofthesepropertiesandwanttorentthemout 1.)IsitpossiblethatonlyIshowthecompleteincomefromthese2properties(andmywifeshowsnoincomefromthem)i.e.rentgeneratedoutofthese2properties.Bothofusarein30%bracket. 2.)IamlivingonrentinthesamecityandclaimingHRAbenefit.Thereasonforstayingonrentisthatthepropertyrentedbyusisveryclosetomywife’soffice. Pleaseshareyourguidanceandhelpme! Regards Abhishek Toadd,Ihaveclosedmyhomeloansandneverclaimedanyhomeloadbenefitfortheseproperties DearAbhishek, 1–Ideally,therentalincomeshouldbeshownaspertheshareofownership. 2–Howabouttheproximityoftheownedpropertiestoyour/wife’sworklocation? HiSreekanth Thanks! 1.)Theoneweareliving(rentedone)is2kms.Thepropertythatweownare12kmsand23kmsfarfrommywife’soffice. 2.)Also,pleaseguidemeonanotherthing.Ifthecostofpropertyismorethan30lakhs,weneedtoshowitinourincometaxreturn,right.Ipurchasedpropertyinsay2011butIpaidtheamountininstalmentsasthepropertywasunderconstruction.Ihavegotthepossessionofpropertythisyearhowevertheregistryisstillpending.WhatistheidealtimetoshowthatIhaveboughtapropertyover30lakhs (a.)whenImakefirstinstalmentforthatunderconstructionproperty(assumeinstalmentismucharound10-15lakhsfor1styear) (b.)whenigetthepossessionofproperty (c.)whenthepropertygetsregistered Inmycase,IhavenotreportedwhenIboughtit.ButIhavegotthepossessionnowandregistryispending.SoshouldIgowith(b)or(c)orsomeotheroption. Ifthepropertyisinjointname,dobothofusneedtoshowthepurchaseofpropertyinoutreturns. Regards DearAbhishek, 2–ItisnotmandatorytoinformtheITdeptaboutthe‘highvaluetransaction’separatelyintheITR,asmostofthesetransactionsarereported(ifyourpropertyvaluegetsregisteredfor>Rs30Lakhs,thenquotingPANismandatoryandalsothesekindoftransactionswillbeinformedbytheofficesofRegistrarstotheITdept). Whenthepropertygetsregistered,inthatparticularFY/AYyear. Kindlyread: HowIncomeTaxDepartmenttrackstheHighValueFinancialTransactions? ListofFinancialtransactionswherequotingofPANismandatory HiSreekanth, Ihavetakenaloanonproperty1andusedtolivethere.Ihaveclaimedtaxexemptionasselfoccupiedinpreviousyears.NowthehouseloaniscompletedandalsoIhaveletitout.Ihavepurchasedanotherproperty2andtookaloanonitandamstayingnowinit.Howisthetaxtreatmentforthese?CanIshowproperty2asletoutandclaimthefullinterestonproperty2afterdeductingrentfromprop1?orIneedtoshowproperty2assopandlimittaxto2lakhandshowrentfromprop1asprofit? Thanks BhanuPrakash DearBhanu, Asyouhavelet-outproperty1,yourtenantsmightbeclaimingtheHRA.So,ideallyyoushowitasLet-outone. AsyouareresidinginProperty2,itisbetteryoushowitasSOPandclaimincometaxbenefitsaccordingly. HelloSir, IhavepurchasedaFlat9monthsbackandiampayingEMItothebank.AmieligibletoclaimInterestPaidduringthisperiod.BuilderpromisedtohandovertheflatonlyonMay2016,henceiamstayinginRentedhouse.ShallisubmitHRAandInterestPaidaswell? thanks Hemanth DearHemanth..Kindlyread:“UnderconstructionProperty&IncomeTaximplicationsonhomeloan“. ThanksSrikanth. Yourexplanationisverymuchclear.Goodwork. HiSreekanth, IamaCentralgovtPSUemployeeandstayinmycompanyownedquarters.ForthatmattercompanyneitherpaysmeHRAnorIwon’treceiveanyHRAexemption.Ihavenoissueswithit. Butmyhusbandbeingasoftwareengineer,heisalsonotclaimingforanyHRAexemptionthinkingthatheisnotsupposedtothataswestayinGovtquarters. MyquestioniswhetherhecanclaimforHRAexemptionornot,ifsoinwhatwayandanyproofsneedtobesubmiitedforthat. DearPrema, Asheisnotpayinganyrent,HRAexemptioncannotbeclaimed. Ifhepaysmetherent,canheclaim? HiSrikanth, MyparentsarestayinginahouseinmyVillage(Kerala),thathousingloanispaidbyme(onmyname).IamnotgettinganyrentfromthisHouse. AndIhadpurchasedAflatinBengaluru,thatloanalsopaidbymeonly.IamworkinginBengaluruandstayingwithmyfamily(Wifeandchild). SOpleasehelpmehowcanIsavetheIncometax?? DearSatheesh..Ifyouhaveself-occupiedBlrproperty,youcantreatisSOPandclaiminterestpaymentsofuptoRs2Lakhu/s24. YoucantreatthepropertyinKeralaaslet-outoneandclaiminterestpayments(nolimit)u/s24b. Read:Incomefromhouseproperty&Incometaximplications. HiSreekanth Mycaseis“SelfOccupiedProperty–AportionofitisSelf-occupied&anotherportionisLet-out”.Buttheproblemhereisthatmineisaflat.I’verented1BHKtosomeoneelse&resideintheotherportion,whichis3BHK. HowdoIdividethehousingloaninterestbetweentheletoutproperty&self-occupiedpropertyinthatcase?? Pls.guide Iunderstandfromsomeotherthreadthatifanyportionoftheselfoccupiedpropertyisletout,fullhomeloaninterestexemptioncanbeclaimed,withoutupperceilingofRs2Lakhs.Butasperyourarticle,that’snotthecaseandIneedtodividebetweenthetwoshares?? DearNikhil..2kitchensprovidedinaFlat🙂? IfportionofpropertyisSOP&anotherportionislet-out,youcantreatitasifitistwounitsforthepurposeofcomputationofIncomefromHouseProperty. Rentalincome,propertytaxesandinterestpaymentscanbeAPPORTIONEDbetweentheletoutportionandself-occupiedportiononbuilt-upfloorarea. (incomefromfirstfloorwhichisletoutshallbecomputedseparatelyasperletoutprovisionsandthefloorwhichisself-occupiedshallbecomputedseparatelyasperself-occupiedprovisions.Municipaltaxandinterestshallalsobeapportionedonthebasisofbuilt-up/floorarea.) Sir,ItakeaflatinhooghlywestBengal&itisvacant.MyfatherisnotwellIstaywithhiminsamecity&payhouserenttohim. Isubmittedtomyofficeitfile1)Homeloaninterestbenefit2)Principalhomeloanbenefit3)HRAbenefit(tosubmittinghouserentsleepsignedbymyfatherwithhisPANcardnumber)Heis65.Myworkingplaceis100kmfrommyresidence. Isitok?orIcanfaceanytaxlawproblem.MyfatherincomeisyearlyRs.40000 Waitingyourvaluablereplysoon. DearSOUMEN..Basedontheaboveinfo,youcanclaimbothtaxbenefits&HRA. Sir Ihaverecentlyboughtaflatinmeandmywifenameunderjointownershipand100%loanamountispaidbymeasmywifeisahousewife.Thispropertyisrentedoutand100%incomefromhouseisreceivedbymywifeonheraccount.Arentagreementhasalsobeenexecutedinhername.Sheisnotemployedandisnotfilinganyreturn. CanIcanclaiminterestupto2lakhundermynamebyshowingnegativeincomefrompropertyasalltherentisbeentakenbymywifeandiamnothavinganyincomefromthehousebutiampayingtheloaninterest. Alsoiwouldliketomentionthatiamlivinginacompanyleasehouseandthishouseisthefirsthouseundermyname. Deardiwakar, TherentalincomeshouldbeshowninITRsaspertheownershipratio. IfEMIsaregettingdeductedfromyourindividualaccountandiftheloanstatementisissuedinyournamealone,youalonecanclaimtaxbenefitsonhomeloan. Sir, Ihavetwohouses 1.inrohinidelhiwhichisvacant 2.otherhouseisinpalamvihargurgaon.thishouseisletout. IamstayingonrentinDwrkadelhi MyqueryiscanIavailrebateonhbainterestfortwohousesandhrarebateforaccomaodationstayingonrentindwarkaregards Dearupadhyay, Iamnotawareofthelocalitiesandthedistancebetweenthem(fromyourworklocationtoyourproperties). Ideallyyoucandeclareanyoneofyourpropertyaslet-outandtheotheroneasSOPbasedbasedonwhichisbeneficialtoyou. ButifyourworklocationisveryfarfromyourpropertieslocationthenyoucanclaimHRA&taxbenefitstoo,butyouneedtojustifyyourdecision(ifrequired). Kindlyread:‘Incomefromhouseproperty&Taximplications’. thanksforinformationsir DearSir Ihavethreeownedflats,twoofwhicharelocatedinHyderabadandanotherisinMumbai.Forallthreeflats,Itookthehousingloanfrombank.Currently;IstayinarentedaccommodationinHyderabad.ThereasonbeingHyderabadflatsareintendedforinvestmentandcurrentlynotletout.Undermyinvestmentdeclaration,IhaveconsideredmyMumbaiflatasself-occupied.Myparentsstaythere.OthertwoflatsinHyderabadhavebeentreatedas‘deemedtoberented’. Accordingly,Ihaveclaimedthefollowingdeductions:- 1)LossondeemedtobeletoutpropertiesinHyderabad(Section23) 2)Interestonborrowedcapitalforself-occupiedpropertyatMumbai(Section24) 3)Principalrepaymentforself-occupiedpropertyinMumbai(Section80C) However;mycompanypayrollteamremovedinterestonborrowedcapital(SELF-OCCUPIEDPROPERTYINMUMBAI)frommydeclarationwithoutspecifyinganyreason.Moreover;theprincipalrepaymentfordeemedtobeletoutpropertieswassummedupandconsideredundersection80C;insteadofprincipalrepaymentforSELF-OCCUPIEDPROPERTYINMUMBAI. Accordingtomyknowledge,interestonborrowedcapitalandprincipalrepayment(FORSELF-OCCUPIEDPROPERTYINMUMBAIONLY)shallbeconsideredirrespectiveoflossondeemedtobeletoutpropertiesinHyderabad. PleaseconfirmifmyunderstandingisrightandIcangetbacktomypayrollteamforthiserror. Regards Nilesh DearNilesh, 1–Theyhavetogiveyouthereason.IbelievethatyoucanclaimtaxbenefitsoninterestpaymentsofMumbaiproperty(SOP). 2–PrincipalrepaymentstotheextentofRs1.5Lakhisonlyconsidered.So,probablytheywouldhaveconsideredaccordingly. HiSir, Iamplanningtoconstructhouse(with18lakhs)forSOPasCo-ownerwithmybrother.SohowmuchIameligiblefortaxbenefitsandhowtocalculatethesame. Pleaseadviseforthebelowmailid. DearRaghu, Kindlyreadbelowarticles: Jointhomeloan&ITbenefits. Incomefromhouseproperty&Taximplications. HiSreekanth, IhaveboughtaflatinNOIDAandshallgetthepossessionoftheflatbyMar16,thisismy1stproperty(SOP).MyofficelocationisinDELHIaround35kmfrommyflatlocation.AsIlivenearbymyofficeanddon’twanttoshifttomyflatinNOIDA 1)CanIclaimbothtaxrebateonhomeloaninterestaswellasHRAexemptionforrentpaidinDELHI? 2)If1)aboveisYES,thenhowtherentalincomewillbeshownfortaxcalculationsforNOIDAflat,if a)itisactuallyrentedouttosomeone b)itisvacant c)myparentsreside DearRakesh, 1–Yes(butyoumayhavetojustifyyourcaseifrequired). 2–Letmeknowyourplan.Areyougoingtoletouttheproperty? Sreekanth, 1)Justifytoincometaxdept?,(ifmycasefallsinscrutiny)orwithsomedocumentsatthetimeofITRfiling? Isjustificationofdifferentcity/locationsofofficeandflat(SOP)notapplicableinmycase?? 2)Yes,myplanistoletouttheflat,butifidon’tgetsuitabletenant,itmaybepossiblethatitwillbevacantthroughouttheyear. pleasesuggest.. DearRakesh, 1–Onlyatthetimeofscrutiny(ifany).Yes,asyouliveindiffcitiesyoucaneasilyjustifyyourcase.‘Distance’isthekeypointhere. 2–IfyoutreatitasLET-OUTone a)Read:Incomefromproperty&Taximplications. b)Vacant:Norentalvalueisshownwhencalculating‘incomefromproperty’.Youcanclaimtotalinterestpaymentsu/s24. c)Ifyourparentsreside,youmaytreatisasSOPorLet-outone(iftheypayyourent). HiSreekanth, Igotlittleconfusedhere. Asthisismyfirsthouseproperty,IthoughtitwillbetreatedasSOPonlyirrespectiveofwhetherIactuallystayornot.Butasperyourreply,IfirentitoutitwillbetreatedasLOP/DLOP,IfitistreatedasLOP/DLOPthenamIeligibletoclaimhomeloaninterestrebatewithoutthelimitof2lac(asthecaseforLOP/DLOP)??? regards rakesh DearRakesh..Ifyourentitout,itistreatedasLOP.Yes,youcanclaimfullinterestpaymentsastaxdeductions. ThanksSreekanth, IsPPIadjustmentalsoapplicableforLOP(1stproperty),asIhavepaidhomeloaninterestofmorethan2lacsforthisaswellaslast3FYs…??? HiSreekanth,Imstillwaitingforurkindreplyontheabovecomment….thanks DearRakesh..Yesitisapplicable.. HiSreekanth, Ihave2properties.1insamecitywherewearestayingwhichisSOPand1atmyhometown. SOPhashomeloanwhichiscurrentlygoingon. Myfamilystaysatmyhometownpropertyanddoesn’thaveanyloanonit.Noincomefromthisproperty.DoIneedtoshowsomeincomeeventhoughthereisnosuchaincomefromthisproperty. HowcanIavailtaxbenefitsforSOP? DearVrushali, Ifyourhometownpropertyisoccupiedbyyourparents,thennoneedtoshowany‘rentalincome’. Youcanclaimtaxbenefitsonyourhomeloanpropertyasgiveninthearticle. ThanksSreekanthforquickreply. ItmeansIcanshowprinciple(under80C)aswellasinterestupto2lacsunderselfoccupiedproperty.Isthiscorrect? YesdearVrushali. Read:Homeloan&Taxbenefits. ThankyousomuchSreekanth.Ireadalotondifferentsitebutnowit’sclearafterreadingonursiteandgettinghelpsoquickly.Reallyappreciated.Thanks! ThankyoudearVrushali.Kindlysharethearticleswithyourfriendsandkeepvisiting🙂 HiSreeKanth. Ihaveaquestion.Iamlivinginaselfoccupiedhome(forwhichihadtakenHomeloan)andmywife(duetoherstudies)islivinginsomeothercity(withherparents)canipayrentonbehalfofmywifeandclaimHRAexemptions.Inmycaseiampayinghomeloanaswellasrent.Pleaseletmeknowwhatallicanclaimasexemptions. Thanks DearAmardeep..Ibelievethatthisisnotacceptable. Hiihaveatrickysituation. IOwn2houses. 1.oneinmyhometown(Caniconsideritasselfoccupied) 2.Oneinthecityiamworking(Letout) Forbothabovehouse1tookseparatehomeloan. Iamstayinginarentedhouse. Questions. 1.Thehousewhichisinmyhometowncaniconsidertheinterestin(24atill2000000)andprincipalin80c? 2.Thehousethatisinmyjobcityisletout,caniclaimintrestafterdeductingincomeofrentandtaxitgoesto336000aspartof24(b)? 3.sinceiamstayinginrentedhousebypayinglessthat100000perannuam,caniclaimthisaswell? allabove3optionsatatimeispossibleornot? DearSandeep, 1–Yes,butifrequiredyoumayhavetojustifyyourdecision.Forex:YourparentscanoccupyitandcanbetreatedasSOP. 2–ThepropertyinyourworklocationhastobeideallytreatedasSOPright?Isthereanyreasonforyoustayinginarentedaccommodation?(Isdistancethereason?) HiSreekanth, Myapartmentis20kmfrommyworkplaceandthisisoneofthereasonsIliveonrentclosertowork.Iwouldliketoclaiminterestformyhomeloanundersection24andalsoHRA.Doyouthinksection23(2)(a)and(b)willapplyandIwillnothavetoapplynotionalrentasmyapartmentisnotletoutthisfinancialyearplease? Thanksmuch! DearSam, Ifyoucanprove(ifrequired)thatyourworklocationisfarfromyourhome,youcanclaimbothHRA&homeloantaxbenefits. IsitgoingtobevacantfortheentireFY2015-16? Ifyes,annualrentalvalue(section23)isNILinthiscase. Hi, Iboughtasmallflatinmynamein2005andlateriwilled2/3rdofittomymomandsisterwhoweredependentswithoutanyincome.Theynowstayinthathouse.ThatwasloanedthoroughHDFCandthatloaniscompleted.Icontinuetoshowthatasself-occupiedhousewithoutanyinterestclaimorrentalincome.MyhusbandandIboughtanapartmentcoupleofyearsasjointownersandwelivethere.Formytaxpurpose,thisisdeemedlet-outhouse.So,icalculatelossonHPbyassuming50%ofFMVand50%ofinterestofthecurrentloan.Formyhusband,thisisfirstHP.Canheassumethisasself-occupiedandshowinterest(withcap)withoutanyFMVorHPlosscalculations? DearPrathipa, AsyouaretreatingitasLet-outproperty,yourspousealsohastotreatitaslet-outoneonly. IncaseifyourhusbandwantstotreatitasSOPthenyoualsohavetodeclareitasSOP. Iamstayinginmyownhouse.Idonothaveanyloanonmyhouserightnow. IamgettingHRAfrommyjob.IampayingtaxonmytotalHRAsofar. WillIgetanyexemptionforrepairsinmyownhouse. DearKSRao..Ifyoudonothaveanyhomeloan,notaxbenefitscanbeclaimed. maybethedumbestquestion,butIwanttobesure,the1.5lakhand2lakhlimitsarepermonthorperannum? DearGG..Wishtheywerepermonth..Thenformostofthetaxassesseeswhohavehomeloans,thetaxliabilitycouldbeNIL🙂 Theyareperannumlimits. Hi Meandmywifeboughtaflatasco-ownersinsamecitywework.WegotpossessioninMay2015.Fromthenonitsleftvacant. Whatiamnotabletounderstandis:doineedtoshowmyhouseaslet-outwithsomemunicipaldecidedrentalvalueasincomefrompropertyandcanclaimforfullhomeloaninterestunder24(b). Secondlycaniaddmypre-emiinterestpaidbeforepossessiontoit? DearVarun, Areyougoingtodeclareitasaself-occupiedpropertyorlet-outone? Iflet-out,youcandoso. RegardingPriorperiodinterest,kindlyread:Underconstructionproperty&IncomeTaximplications. Yes,thinkingofdeclaringasLet-Out. Isitlikeonlyrented-outonescanclaimfullinterestexemptionandnotthevacant,butdeclaredasLet-Outwithfairmarketvalueshownas“Incomefromhouseproperty”. DearVarun, Ifyouaredeclaringitaslet-out&keepingitasvacant,youcanstillclaim‘fullinterestamount’astaxexemption. Hi, IamasalariedpersonfromKolkata.IownaflatjointlywithmymotherinKolbutstayingwithmyparentsattheirplacewhichis2KMawayfrommyflat.TheflatscurrentlyavaccantpropertyforwhichIhaveahomeloanandwanttoavailtaxdeductionforthesame.CanyoupleaseadviceifIneedtoshowincomefrommyflatinITreturn,ifyeswhatshouldbetheminimumamount. Thanks. DearBagchi..Youcanshowitasaself-occupiedproperty.ThereisnorentalincomeonSOP.YoucanclaimtaxbenefitsofuptoRs2Lakhoninterestpaid&Rs1.5Lakhonprincipalrepayment. Kindlyread:UnderstandingTaxImplicationsofIncomefromHouse/Property Hi, Ihadaqueryontherentalhouse,Ifamstayinginarentalhouseinanothercity(duetoemployment)andmyfamilyisstayinginhometownonaRentalHouseagain,CanIavailtaxbenefitbyclaimingrentpaidinbothhouses?Pleaseadvise. DearGautham, IbelievethatyoucanclaimHRAonlyforonehouse(cityofemployment). Hi, WetookahomeloanofRs.30,00,000(myselfandmyhusbandaretheprimaryandsecondaryowners)lastyearandwerepayingpre-EMI.Now,registrationiscompletedandtheflatpossessionisinthismonth. Couldyouletusknowwhatamounttoenterinbelowfields? 1.InterestonHousingLoan-SelfOccupiedProperty(Sec24(b)) 2.HousingLoanPrincipalRepayment Thanks, Priya DearPriya, Kindlyreadmyarticle–‘Underconstructionproperty&Taximplications”andreverttomeifyouneedmoreinfo. ThanksforsharingthelinkSreekanth.AsIunderstand,whateverwehadpaidfromtilltheregistrationcanbeclaimedinfiveyearsandafterregistrationcanbeclaimedinthisyear. Ifthisiscorrect,canyoupleasehelpmewiththebelowclarification? WetookRs.30,00,000asloanamountandhowmuchshouldIdeclareinthecurrentcompanyforInterestandPrincipalcomponents–sections24(b)and80C? Thanks, Priya Registration–ImeantheconstructionofflatiscompletedinourcaseandpossessionisNovember2015. DearPriya, Theprincipalrepaymentandinterestamountsareasperyourloanstatement.Youneedtolookatyourstatementandsubmitthedetailswithyouremployer. ThanksSreekanth.TheloanstatementIobtainedfrombankisbeforeregistrationcompletion.So,Ineedtolookatthatandenterdetails? Isthiscorrect? -Priya DearPriya, Youcanrequestforlateststatementoryoumaydownloadthelatestone. Thanksalotforyourtimeandpatience🙂 Reallylikedthesiteandyourdetailedexplanation! Can’tthankbeyondthis🙂 -Priya Keepvisiting:). Kindlysharethearticleswithyourfriends🙂 Yeah,definitely.Itisworthvisiting🙂 DearSreekanth, Ihavebelowqueries. MyparentsarestayinginMumbaiinmyownproperty,havehomeloanonthesamebutIamstayingonrentinPuneforjobpurpose.IpayEMIeverymonth. SoshallIgofordeemedtobeletoutpropertyoptionorselfoccupiedpropertyoptionandalsowantedtoknowcanIclaimHRAaswell? WhatallthedocumentsIwillneedtoshowtocompanyifIgoingfordeemedtobeletoutpropertyoption? Regards, Siddharth DearSiddharth, Ifyouhavetoclaimtheentireinterestpaidamountastaxdeduction,youcanlet-outyourpropertytoparents.Youhavetoissuerentreceiptstothemandyouhavetoshowthisasyourrentalincomewhilecalculatingyour‘incomefromhouseproperty‘. YoucanalsogetRentalagreementdone(betweenparentsandyourself). YoucanclaimHRAaswell. Isitnecessaryfortherentalagreementtoberegisteredandtherentreceiptstobeissuedeveniftheparentsaren’tgoingtoclaimHRAonthesame?Isitaproofofincomethatneedstoproducedbytheowner? Also,Isthereaquickwebsitethatyouknowoftocheckouttherentcontrolnormsforaparticulararea?Howcansomeoneknowthenotional/standardrents? DearAditya, RegistrationofrentalagreementmaynotbemandatorybutifyouarereceivingrentalsfromyourparentsthenyouhavetoshowthisrentalincomewhenfilingyourITR. AsofnowIhavenotcomeacrossofanysuchwebsite,willsurelyupdateyouifIfindone. SirIamstayingwithmyparentsinmyparentalproperty.Ihaverecentlybought2flats.Oneinnoidaandanotherinthesameareawhereiamcurrentlystayingwithmyparents.Ihaveahousingloanof37lakhforthenoidaflatand98lakhsformyotherflat.Iwishtogivebothflatsonrent.Kindlyadvisethetaximpications.AlsokindlyadvisehowIcanbestutilisethecurrentsituationforthebesttaxadvantageasIprefertostaywithmyparentsratherthanmovetothenewlyboughtflats. DearBanerji, Areyouasalariedperson?Isyourworkinglocation(assumingyouareemployed)farfromyourresidence(parentalproperty)? IbelieveyoumayhavetodeclaretheRs98Lakhhomeloanpropertyasself-occupiedpropertyandtheNoidaflatasLet-outproperty. Readmyarticle:IncomefromHouseproperty&Taximplications. HI, Iamwillingtotakeahome.CanIhavemyfatherasco-applicantforloan.CanIhavemymotherastheownerorco-owneroftheflat.Whichscenarioworks??Pleasedoletmeknowasmyfatherforsuretakesloanbutmeormymotherwillbeownersofthehouse. DearSindhu, Ibelievesomebanksmayinsistyourmothertobeco-applicantifsheisgoingtobetheco-owner. Somebanksmayagreewithyourfatherasco-applicanttoo.So,kindlycheckwithyourbanker. Isyourfather/motherearningmembersofyourfamily?WhoisgoingtopayEMIs?MayIknowifyouaremarried? Kindlyreadmyarticle:JointHomeLoans&Taximplications. HiSir, Ihavetwoproperties. IamacoownerforFlat1alongwithmyfatherandheismyco-applicantforloan. ForFlat2Iamthesoleownerbutmyco-applicantismywife,whowasahousewifeatthattime. ForbothIampayinghousingloanalongwithinterestcompletelythroughmybankaccountonline. IusedtostayinFlat1alongwithmyfatherandhavebeingshowingitasSelfoccupiedpropertyandtheotheroneisrentedanddisclosedrentonitinmyearlierreturnstoo.SoIgothousingloanexemptionuponSOPwithlimitandalsoonrentedpropertywithoutlimitonFlat2afterreducingtherentreceivedandtaxesetcpaid. Butrecently,forfamilyandhealthreasonsIamlivingarentedhousealongwithmyfatherandpayingrentthroughmybankaccountonline.MytFlat1isstillvacantthis. NowmyquestionisamIeligibleforHRAexemptiononrentpaid? Ifso,canIclaiminterestandprincipalpaidonbothhousingloans? Dobothofthemaretobeshownasrentedoroneofeitherwillhavebetreatedasdeemedselfoccupiedforgettinginterestandprincipalpaidexemptions? DearKishore, Arealltheseproperties(flat1,flat2andrentedone)areinsamelocation/area? Howfarisyourworklocationfromflat1andyourcurrentresidence(rented)? Hi, Icurrentlypayrenttomyparents,claimHRAbenefitandstaywiththem.Thehousebelongstomyparents. I’verecentlypurchasedanotherflatinthesamecitybutiamnotintendingtostayinthenewflatthisFYyear.I’llkeepitidle. 1.CanicontinuestayingwithparentsandclaimHRA? 2.DoihavetoshowthenewflatasDLOP?Iveheardthatfor1yearwecanavoidshowingnewflatasDLOP. 3.Caniclaimtaxbenefitoninterestupto2lakhonthenew,idleproperty? 4.IfletssayishowitasDLOP,caniclaimfullinterestastaxfreeoronly2lakhcap? thankssreekanth.Youseemveryknowledgeableandhelpful!appreciateit. IhaveaflatatbadlapurwhosehomeloanhavebeencompletedsocaniclaimHRAforincometaxbenefit Dearvanita..Isitself-occupiedbyyou? iamstayinginrentedhouseandclaimedHRAbutmyownhouseisoccupiedbymyparentsandamnotderivinganyrentfromit.Canyoupleaseletmeknowwhetheritsconsideredasletoutandneedtoprovideareasonablerentforthat? Ihave2properties.1)withaloanof20Lakhs,2)withaloanof40Lakhs. TheloanforfirstonewastakeninFY2011-12butthepossessionisnotyetdone.Maybeitwouldbedoneinnextfewmonths.Iheardthatiftheconstructionisnotcompletedin3yearsfromhomeloanyear,oneisonlyeligibleforrebatedonlyonRs30000(notRs2,00,000).Ialsohearthatthisisapplicableonlytoselfoccupiedproperty¬letout.Isthistrue?Idontwanttodeclaremysecondpropertyasselfoccupiedasinterestoutgoforthatloneisquitehighandiwanttoclaimmaxincometaxrebateonthat. canyouplssuggest: 1)ifitismandatorytodeclareanyonepropertyasselfoccupied.Isitpossibletoshowbothpropertiesasletout. 2)IfaboveisnotpossiblewhatisthewayouttoclaimrebateonRs2,00,000forthefirstpropertyifishowitasself-occupiedasthepossessionwouldbebeyond3yearsofhomeloan. DearRishit, Yes,3yearsclauseisapplicableandIbelievethatthisisapplicabletobothSOP&Let-outproperties. Ifyouareemployedsayinadifferentcityotherthantheplace(s)ofmentionedproperties,youcanshowthemasLet-outpropertiesandalsoclaimHRA. HiShreekanth, Ihave2flats,1stflatisjointlyownbymywife&me(mywifeis1stowner2ndnameismy) 2ndflatalsojointlyown,inthisflatiam1stowner wearestayingon1stflat&[email protected].&getscash,IampayinghomeloanEMIRs.17629p.m.on2ndflatwhichisjuststartedinJun-15 howwilldotaxplanning?shalligetfullInterest&Principalamountasataxdeduction. shalligetHRAtaxbenefit DearAjay, 1stFlatisSelfoccupiedproperty.YoucannotclaimHRAbenefit. 2ndFlatisaLet-outproperty.Youcanclaimentireinterest(nomaximumlimit)amountandprincipalrepaymentamountastaxbenefits. Kindlygothroughmyarticle:Incomefromhouseproperty. DearSreekanth Ihaveaflatjointlywithmywife,withmywife’snamefirstandmineassecond.However,theentirepurchasepricewaspaidbymeandthemaintenancetooisentirelybornebyme,asmywifeisnotworking.IfIamtotreatthisasdeemedtohavebeenletout,doIneedtotreattheflatas100%inmynameeffectivelyfortaximplication(I.etheentiredeemedrentalistaxedinmyname)orcanIshow50%inmywife’snameand50%inmine.Alsowhichsite/governmentdocumentdoesoneuseasbasisonwhichonehasarrivedatthedeemedrental? Dearfrank, YoumayenterintoasimpleagreementmentioningthatyouwouldbepayingtheentireEMI(informyourbankertoo)andhenceforthyoumaypaytaxesontherentalincomeaccordingly. (Youmaygothroughthisarticle) Hi Iamhavingflat1inmynameandflat2innameofbothwifeandmeforflat1paidinterestis50000andflat2paidinterestis400000(90%meand10%wife)nowifrentalconsiderdedforflat1willbearound6000permonthandforflat2is10000permonthsowhichflatshouldishowselfoccupiedandwhichshouldishowrentoutpleasereply Thankyouinanticipation Prashant Dearprashant..Areyouresidinginanyoftheflats? HiSreekanth, Iamhavingtwoflats.OneflatisselfoccupiedandIamclaimingloanbenefitfromit.Theotherflatisvacant. Pleaseletmeknowfollowinginformation 1)WhichformshouldIfill.ITR1,ITR2A,ITR2 2)IsherearulethatIneedtoshowanyminimumrentalamountasincomeforthevacantflat?PleasenotethatIamnotclaiminganyloanbenefitfromsecondflat. REgards, ShintoThomas DearShinto, 1–ITR2A(ifyoudonothaveanycapitalgains.Readmyarticleon‘WhichITRformtofile?‘) 2–Yes,youcanshownotionalrentalvalue.(kindlyreadmyarticleon‘Incomefromhouseproperty‘) Ihavefewqueriesonthistopic. Iowntwopropertiesinmynative.Bothareletoutlastyear.Beforethat,myfirsthousewasoccupiedbymyparentsandIusedtostateitas“Selfoccupied”.Iliveindifferentcityonrent. Ialwaysshowedsecondoneasletoutandshowedrentalincometoit.Forthefirstone,lastyear,thetenanthaspaidrentonmyDad’sname(throughcheque)whohasnootherincome.ShouldIcontinuetoshowitasself-occupiedorshowitasletout. OnemorequestionIhaveonmyfirstproperty.Itookatop-uploanonmyfirsthouseandusedtheproceedsforconstructinghouseinthecityIamlivingin(Constructionisnotyetcompleted).CanIclaimdeductionofinterestonthisforthetop-uploan? Thx Ravi DearRavi, Ifyourfirstpropertyisgivenonrent,showitaslet-outonly.Since,thepropertyisonyourname,therentalincomeshouldbeincludedinyourITR. YoucanclaimtaxdeductionsonyourTopuploanontherespectivepropertyonly,butyoucannotclaimtaxexemptionsuntiltheconstructioniscompleted. Kindlyreadmyarticleon:Underconstructionproperty&Taximplications. ThanksalotSreekanthforyourtimelyreply. Ravi HiSreekanth, WhatisthecasewiththeguyswhohaveonepropertyasSOPandtheotherpropertyisoccupiedbyparent?Howthatistreatedintheincometaxaswelliswealthtaxapplicableoverthesecondpropertyoccupiedbyparents? Thanksinadvance. Thanks, Shailesh DearShailesh, YouhavetheoptiontotreateitherofthehousesasSOPandtheotheroneaslet-outone. DearSreekant, Ihaveaquestion.IncaseIownonepropertyjustinmynameandotheronealongwithmywife.Whatisthetaximplicationsinthatcaseforthesecondproperty?CanthefirstpropertywouldbeSOPformewhilesecondoneformywife,incaseIamunabletofindatenant. Thanks, Tarun DearTarun, BothofyouhavetotreatonlyonehouseasSOP. Dearsir, IamasalariedpersonandpresentlystayingatarentedhouseandavailingHRAbenefitfromemployerthroughform16.IhaveoneflatwhichhasbeenpossessedinOctober-14andwasvacantin2014-15F.Y.Iamnotstayingatmyownflatduetolongdistancefrommyworkingareaandtheareaisalsonotsodevelopedyet. Iamhavinghomeloansince2012andIhaveneverclaimedtaxbenefitforthisloanasthepropertywasnotpossessedearlier(beforeOct-14). NowthisyearIwanttogettaxbenefitoftheinterestpartoftheloan. Myquestionsare:- 1.WhichITRform,shouldIsubmit? 2.HowtoclaimtheinterestamountofHomeLoan? 3.InwhichsectionofITR,Icanputtheinterestpartofloan? 4.Howtodeterminethenotionalamountorjustalumsumcanbeassumed?? 5.AsIhavepaidInterestbutnotclaimedbenefitoflast3years,soshouldIclaim20%oftotalinterestamountalreadypaidinlast3yearsuptonextanother4(1+4=5)years?? Requesttopleasehelpmebyansweringmyabovequestions. Thanksandrgds, SoumenKar. Dearsoumen, 1–Kindlyreadmyarticleon–AY2015-16,whichITRformtofile? 2&5-RegardingClaimingoftaxbenefitsforPre-constructionperiod,kindlyreadmyarticleon–Preconstrucitonperiod&Taximplications. 3–Underthehead‘Incomefromhouseproprety’. 4–Itcandependontheprevailingrentalvalues. ThankyouMr.Reddyforyourreply.Iwillgothroughyourarticlesthoroughlyandthenrevertifanyfurtherdoubt. ButonethingIhavenotedandwanttoappreciatethat,yourarticlesandrepliesarespecificandeasytounderstand. ThankyouSoumen.Kindlysharethearticleswithyourfriends🙂 DearMrReddy, Ihaveonepropertyatlucknow&otherpropertyatNoida&forbothiampayinghomeloaninterest(firstitislesserinterestandsecondpropertyitsveryhightinterestamount).currentlyiamworkinginnoida.myparentsarelivinginfaridabadinthierownhouse.caniclaimhomeloaninterestbenefitonbothpropertyasletoutproperty.AsiamstayingatFaridabadwithparents.caniclaimHRAbenefitandtotalinterrestonbothletoutproperties.kindlysuggest. DearMukesh, Ifyourworkplaceandresidencearelocatedintwodifferentcities/towns,youcanclaimHRA&taxbenefits(ontwoproperties)aswell. Hi, IliveinBangaloreinaCompanyleasedaccommodation(whichisconsideredunderperquisitesundersalary.)andIhavetwoapartmentsinDelhi.Oneapartmentisrentedout.Theotherotherapartment,IgotapossessioninSept,2014′.Ihavenotbeenabletoletoutthe2ndapartment..Whilefillingmyincometax,canItreat2ndapartmentasSelfOccupiedflatordoIneedtoconsiderthemarketvalueandpayIncometaxfrom1stOct,2014? DearPuneet, SinceyouareresidinginBangalore,itisnotprudenttoconsiderthehouseinDelhiasSOP. ItcanbeconsideredasSOPifyourparentsoccupyit. Sir,myqueryisthatIhavesoldmyhousepropertyinOct.2014andinrespectofthatpropertyIwashavingahouseloan,whichIrepaidusingtheproceedsreceivedfromthatsale.AndinthesamemonthaftersellingmyhouseIhavepurchasedanewhousebygettinganewloanspecificallyforthatnewhouse. NowmyqueryishowshouldIdealwiththisinmyIFHPInrespectofInterestandprincipalofboththeloans. DearLakshya, ThetaxbenefitsfromyourfirstpropertyfromApril2014toOct2014canbeclaimedandalsoonsecondpropertyfromNov2014toMar2015. Didyouoccupythenewproperty?(Isconstructioncompleted?) Iamhavingahouseloanonmyoneselfoccupiedhousesince4yearsnowIwouldliketoCompletelyRepayitinthisfinancialyear2015-16, CanIClaimtheinterestforthecurrentyear2015-16inmyreturnofIncomewhichtobefiledinnextyear? CanIclaimthePrincipalAmountofLoanu/s80CinmyreturnofIncomewhichtobefiledinnextyear? DearMahesh, Yes,youcanclaimbothinAY2016-17.ButthetaxbenefitsaggregatelimitsdoapplyforSOP. Hisreekanth, Lastyeariwasstayinginarentedhouseinmysore.ihadboughtaflatinmysorewithhomeloanonjuly2014.alsodoneregistrationonfeb’15sinceconstructionwascompletedbythen.butihavestartedstayingintheflatonlyfrommay’15.soiwouldliketoknowwhethericangetthetaxexemptionforbothhraandhomeloanduringthefinancialyear2014-15 Thanks sanal DearSanal, YoucanclaimhraforFY2014-15. Regardingtaxbenefits,youcanclaimtaxdeductionsoninterestpaymentsduringpre-constructionperiodandalsoregularpaymentsfromthisFY2015-16(AY2016-17). Kindlygothroughmyarticle–Underconstructionproperty,howtoclaimtaxbenefits? Thanksforyourquickresponse.justtoclarifyeveniftheworkiscompletedwithinsameyearwheniboughttheflat(inmycaseitis2014-15)willitbeconsideredaspreconstructionperiod?Ordowehavetoconsiderthepossessiondate? DearSanal, WhendidyoureceiveCompletioncertificatefromyourbuilder?Orpossessioncertificate? Hisreekanth Completioncertificateon20thmarch2015 DearSanal, Whendidyoutakehomeloan?(Loandisbursement??). Kindlyreadmyarticleassuggested.Iamsurethatyoumayfindanswerstoyourqueriesinthatarticle. Sureivlreadthearticle.loandisbursedonjuly2014 DearSanal, Ifboth,dateofloantakenandoccupationdate/completiondatehadtakenplaceinthesameFinancialyear,entireinterestpertainingtopre-constructionperiodcanbeclaimedalongwithregularinterestinthesameassessmentyear.Thereisnoneedtoclaimthepriorperiodinterestin5installments. Thankyou Sreekanth, Ihadtakenahomeloanforpurchaseofanoldhousingpropertyin2009,andIhaveclosedtheloaninJuly2015.Iplantodemolishtheproperty&constructitafreshwithanewhousingloantofundthisovernextoneyear. Forthenewhousingloan,howistheincometaxtreatmentforinterestcomponentgoingtobe? Thanks, Murthy DearMurthy, Isitaself-occupiedpropertyoralet-outproperty? HelloSreekant, IhavefollowingquestionandIwouldhighlyappreciateifyoucouldhelpme. 1)IhavebeenlivinginChinaforlastfewyearsandgottransferredtosamecompanyinJune2014.IjoinedthiscompanyinIndiainJuly2015.IhavenotfiledmyITreturnforlast8yearssinceIwasoutofIndia.Ipaidallmytaxesthere. DoIneedtofileITreturnsforallthesepastyears? 2)Ihave2flats–onewasboughtin2006onahomeloanandnowitisdebtfree.ThisisonrentfromAugust2014.IboughtanotherflatinsamecityinMarch2015bytakinghomeloanandnowitisselfoccupied.AndforthepastyearfromJuly2014toMay2105IwaslivingonarentforwhichIhaveclaimedHRAexemption. CanIdeclaretherecentflattakenonloanasletoutandtheoneonrentwhichisdebtfreeasself-occupied. SecondlyshallIexercisetheaboveoptionfortheassessmentyear2015-16or2016-17sincetherecentflatboughtwasinMarchsotheinterestpaidisonlyfor13daysfortheyear2014-15. Iamnotabletocomeupwithancombinationaboutwhichonetoclaimwhichyear?Totallyconfused.Pleaseadvice. 3)WhichITRdoIneedtofile? regards Nee DearNeeraj, Isitjuly2014??(inthefirstpoint..) Ifyoudonothaveanyothersourceofincome,youcanuseITR2Atofileyourtaxes.Readmyarticle–WhichITRformtofile? HiSreekanth, Recently(sinceApril-2015)IamshiftedtoPuneduetojobchangeandresidinginrentedhouseandclaimingHRAbenefits. IownedahouseatGhaziabadwhichisonrentsinceApr-2015.Samewaspurchasedin2012throughHousingLoan.IamstillpayingtheEMIforthishomebutnotclaimedanyinterestbenefitasIgotpossessionafter3years. NowasIshiftedtorentedhouseatdifferentlocation,canIdeclaremyGhaziabadhouseasSecondhomeforpurposeofincometaxbenefits(showingitasletoutproperty)andclaimcompleteHLinterestastaxbenefitandatthesametimeclaimHRAexemption. Regards, Anurag DearAnurg, Yes,youcantreatthepropertyatGhaziabadasLetoutoneandclaimtheinterestpaymentsastaxdeductions.Kindlyreadmyarticle:HowtoclaimtaxdeductionsofPre-constructionperiod? DearSreekanth, Iownaflat,butliveinabiggerrentedflat.IavailedoftheHRAfortherentedpropertyandhavepaidtheIT(onmarketrentalvalue)fortheownflat,thoughitwasNOTLETOUT.NowIhaveboughtanotherhouseavailingloan.Iamplanningtosellthefirstflattoclearapartoftheloan,Thisaside,thequeryiswhatisthelimitofIncomeTaxthatIcanclaimonnewproperty–bothforinterestandprincipal.Ipayahugesumasinterest.Isthefullinterestremovedfromthetaxableincomeoristherealimit.Ifthereisalimitwhatisthelimit?.Pleaseadvice. Regards, Bhag DearBhag, Arethesepropertiesinthesamelocation&insamecity? Whatdoyoumeanby‘IpaidIT’?Kindlysharetheinfo.. DearSreesanth, Thanksforthepromptresponse. Yes.Bothhousesareinthesamecityandwithin10kmsofeachother. Iamasalariedperson,thusTDSwasdeductedbasedonsalary.Myauditoraskedtoshowsomerentalincome(notionalatleast)thoughthepropertywasvacant.Thus,IhadtopaytheincometaxontheassumedrentalincomeunderOTHERINCOMEasIwasstayinginanotherrentalproperty. Now,Ihaveboughtanotherpropertyandampayingahugeinterest.IamplanningtomovetothenewflatandthushavetofilereturnsunderSOP. Whichismorebeneficial–SOPortotakearentedhouse? FilingreturnswithSOPismorebeneficial or rentingoutthenewflat,showrentalincomeforthenewflatandpaytaxfortherentalincome,availHRAasavailfullinterestasbenefit? Hopethisclarifiesthequery. Regards, Bhag DearBhag, Yourauditorisrightinshowingnotionalrentforavacantproperty. Youhave2propertiesinthesamelocation/city.So,ifyoucanbeabletojustifyfortakingarentedaccommodationthenitisok(thisispurelysubjective).Else,youshouldnotclaimHRA. Thepropertywhereinterestoutflowishigh,considerthatasLetoutproperty(butyouhavetocalculatethenetincomefromthispropertyandthendecide)andconsidertheotherpropertyasSOP. DearSreekanth, Thankyoufortheinputs. Iamsellingthefirstflat(debtfreenow)tosettlethehugeloanamountforthenewpurchasedproperty.Inthisscenario,Iwillleftwithonlyoneflat(new).Thisflatisaround22kmsawayfromplace,soplanningtogoforarentedflataroundmyworkplaceandletthenewflatoutforrent. Now, IwilldeclarewhateverrentalincomeIgetfromthenewflat, paythetaxesforrentalincome, claimHRA, deductthefullamountaspaidtowardsinterest. Isthisgoodenough?IdonotwanttodeviatefromanyITregulations. Regard, Bhag DearBhag, Ithinkthisshouldbefine. Hi, Iamaco-ownerin2flats,onejointlyownedwithmymotherandotherjointlyownedwithmywife. Theonejointlyownedwithmotherisdebtfree.Itisoccupiedbymymother. Theonejointlyownedwithwife–interestisbeingclaimedunderSOP. Pleasesuggest DearVikram…Whatisyourquery? Myqueryis..whichofthejointlyownedflatswouldbeconsideredasSOPandwhichoneletdeemedtobeletout. IfIplantobuyonemorepropertysolelyinmyname,cantheothertwopropertiesnotbeconsideredasdeemedtobeletoutifoneisoccupiedbymymotherandotherbymywife? DearVikram, YoucandeclareonlyonepropertyasSOP.AlltheotherpropertiesaretreatedasLOPs. DonotethathusbandnwifeareexpectedtoconsiderthesamepropertyastheirSOP. HiSreekanth, Factsofthecase 1.Apersonowns2housesinDelhi.Bothofthemoccupiedbyhisextendedfamily. 2.Heisaforeignnational(personofIndianorigin) 3.NowhehascomebacktoDelhiandworkswithacompanywhichhasprovidedhimrentfreeaccommodationinDelhiitself. 4.Healongwithhiswifeandhiskidsstayinthecompanyprovidedaccommodation. Ihavesometrickyquestionshere. 1.Doesstayoftheextendedfamily(fatherandmotheroftheperson)makethathouseaselfoccupiedhouseforthisperson? 2.Canheavailthebenefitofnotionalvaluationofcompanyleasedaccommodationandclaimoneofthe2housesheownsasself-occupiedinhisTaxReturn? Wouldappreciateyourpromptresponse.Thanksinadvance. DearAnmol, Arethesethreepropertiesinthesamelocalityornear-by? IfanAssesseehasmultipleproperties,onlyonepropertycanbetreatedasaSOP. Hehasthehouseinthesamecityatdifferentlocations.SowhetherclaimingonehouseasSOPberightwhencompanyisprovidinghimadifferentaccommodationinthesamecity. Further,doesstayoffamilyallowthepersontoclaimonehouseasSOPwhenhehimselfisnotstayingthere? DearAnmol, Actuallytaxlawisverysubjectivewrtthispoint.IfanAssessefindsitverydifficulttocommutetohis/herplaceofwork(orduetoanyotherjustifiablereason),hecanstayinarentedaccommodationandclaimHRA. Asboththehousesareinsamecity,ibelievetheyshouldbedeemedtobe‘let-out’properties.Veryverytrickysituation🙂 HiSreekanth, IstayinarentalflatinBangaloreforthelastfewyearsandhavetwohouseinanothercity.Boththesehousesareearningrentalincome.IhavebeenoutofajobsinceIcametoBangaloretohandlemyson’seducation.IusetherentalincomeforpayingmyrentalinBangaloreandforotherrelatedhouseholdexpenses. NowcanoneoftheabovehouseownedbymebetreatedasselfoccupiedasIamnotgettinganybenefitsofHRA?. KindlyadviceontheincometaxtreatmentinsuchacaseaswellashighlightwhatexemptionsIcanclaimwhilefilingmyincometax?. Wouldappreciateyourresponse.Thanks DearBalachandran, Doyouhaveanyhomeloanonanyoftheproperties?WhydoyouwanttodeclareoneSOP?(Ididnotgetyourpoint). AreyouplanningtotakeupajobinBlr?WereyouemployedinFY2014-15? DearSir Whataretheadvantagesanddisadvantagesofthefirsthome(SOP)beingentirelyinthenameofthehusbandwiththeloanentirelypaidbyhimandthesecondhomebeingboughtinthenameofthewifewiththeloaninhername.Bothareselfemployed. DearEdison, Itdependsontheincomelevels🙂 HiSreekanth, itsveryniceandinformativearticle.Ihaveaqeury. IfIownhouseincityAandworkandliveincityBonrent,canIdeclarehouseincityAas“deemedletoutproperty”.Also,canIgettaxbenefitonHRAforrentincityB. Whatisthedifferencebw“deemedletoutproperty”and“letoutproperty”intermsoftaximplications DearAnkit, Therearenodifferenceswrttotaximplicationsfordeemedletout&letoutproperty. Deemedletoutproperty:Forex1-Ifpropertyisletoutonlyfor1monthandremainsvacantfor11months,stillitcanbetreatedas‘deemedletout’property. Ex2–Ifhouseisself-occupiedfor2monthsandletoutfor10months,thepropertycanbetreatedas‘deemedletout’one. HiSreekanth, wehaveaflatwhichisjointlywithfather. canipayrenttofatherasheisco-ownerinflat. DearRohit, Asyouaretheco-owneroftheproperty,IbelievethatitisSOP(selfoccupiedproperty)foryoutoo. Hi, Iowntwohouseswithinthesamecity.I’vehomeloansonboththehouses.SocanIclaim2lacsexemptionfortheSOPundersec24(b)PLUStheentireinterestforthehomeloanontheLOP(sincethereisnolimitfortheinterestcomponentonaLOP). thanks -ankit DearAnkit, Yesyoucanclaimthetaxbenefits.. HiSreekanth, Iamlivinginaflatwhichisco-ownedbymeandmyfather(50-50percentshare).CanIpayrenttomyfatherandavailincometaxbenefitonrentpaid?Ofcoursemyfathercanshowtherentalincomeinhisreturn. DearVishwas, Ifyouaretheco-ownerofthepropertyandresidinginthesameproperty,youcannotclaimHRA. DearSreekanthji, Ihavepurchasedonehomeintheyear2004throughhomeloanandprepaidtheamountinMay2014.IhavegiventhathouseonrentandmyselfremainedinrentedhouseandclaimingHRAandshowingincomefromrentedhouse.OnJanuary2015,IhavepurchasedonemorehouseinthesamecitythroughhomeloanandstillcontinuetoberemainedinRentedhouse.Ihavegiventhathousetomyrelative.WhatshouldIdonow?HowtoclaimHRAbenefitsandinterestandprincipalbenefitsforcalculationofITpurpose DearMohammad, Arethesepropertieslocatedinthesamecity/town?Aretheyclosebytoyourworkingplace? HiSreekanth, Icurrentlystaywithmydad.Thehouseisinmydad’sname.IpayhimrentsothatIcanclaimtheHRAasataxbenefit. Thishouseismydad’ssingleproperty.HecomesundertheSeniorCitizencategory. 1.Shouldmydadshowthe“Incomefromonehouseproperty”as‘SelfOccupied’or‘LetOut’? 2.Doesheneedtoshowtherentasincomeorwillhehavetocalculatetheannualvalueofthehouse? Appreciateyourfeedback. DearParag, Hehastoshowitas‘let-out’property(actuallyitcanbecalledaspartlylet-out,asheisalsoresidinginthesameproperty). Yes,heneedstoshowtherentalincomeas‘incomefromhouseproperty’inITRalongwithotherincome(ifany). HiSreekanth, IworkinBangaloreandstayinarentedhouse.IpurchasedaflatinBangalore(BookedonJune2015).LoansanctionedonAug2015.IstartedpayingEMIfromOctober2015andtheregistrationoftheflatisdoneonDec2015.TookpossessiononMarch2015. IhavesubmittedmyHRAdetailstotheemployerandthedetailsarereflectinginForm-16.ButHomeloaninterestdetailsarenotprovidedtotheemployer.Iwouldliketoshowthiswhenfilingmyreturns.Ihavefewquestionsonthis. 1)InFY2014-15,thishousecannotbeconsideredasselfoccupied/letout/deemedtobeletoutastheconstuctionwascompletedinMar2015andpossessiononlastweekofMar2015.SowhattomentionwhilefilingITreturns. 2)Ifthisshouldbeconsideredasdeemedtobeletout,thenwhatamountcanIshowasdeemedrentalvalue 3)WherecanIadjusttheInterestwhenfilingITReturn.ShouldIadjustitwithtotalincomeorshowthevalueasnegativeinIncomefromHouse Thanksinadvance Regards, Riju DearRiju, Kindlycheckthedatesandaretheycorrect?? HiSreekanth, Thanksforyourimmediateattentiononmyquery.Itwasatypoerrorfrommyside.Pleasereaditas2014insteadof2015forallthedatesexceptforpossession.PossessiononMar2015. Regards, Riju DearRiju, Rightnowwhatisthestatus?Isitself-occupiedbyyouordidyouletitout? Forfinancialyear2014-15,youcanclaimHRAforfullyear. Forfinancialyear2015-16(youfiletaxesinjuly2016),youcanclaimtaxexemptionfortheinterestpaidin15-16andyoucanalsoclaimtaxbenefitsonEMIspaid duringper-constructionperiodtoo(subjecttotheaggregatelimits). Calculatethetotalinterestpaidduringthepre-constructionperiod.Theperiodtobeconsideredherewouldstartfromthedayyoutakethehomeloanandendon31Marchthatcomesimmediatelypriortothedateofcompletionofconstructionordateofrepaymentofthetotalloan,whicheverisearlier.Thishastobedoneinfiveequalinstallmentscommencingfromthefinancialyear(FY)inwhichtheconstructionofthepropertyhasbeencompleted. Also,makesurethatwhilefilingincome-taxreturn,youseparatelymentionthepre-constructioninterestclaimintherelevantboxandtheinterestpaidduringtheyearinanother. Sreekanth, Itisnotoccupiedorletout…planningtoletitoutsoon Also,aspermyunderstanding,Icanclaiminterestduringpre-constructionperiodifpossessionandloanapprovedyearissame.PleasecorrectmeifIamwrong. Also,Icannotfindaseparatecolumforshowingpre-constructioninterestinITR1 DearRiju, ForAssessmentyear15-16,youareeligibletoclaimpre-constructinperiodEMIastaxbenefits. Separatecolumninthesense,mentionitseparately.ButforthisAY,youhaveonlypre-constructionEMIs..butfromnextAY,youcanclaimboth pre-construction(ifany)&normalEMIs. HiSreekanth, ihaveahomeloanwhichisforlet-outandinterestpaidisaround1.7lacks. iamplanningtogoforanotherhomeloanforanamountofapprox80lacks,wheretheinterestperfinancialcomesto9lacks. Isthereanylimitationonthenoofhomeloansthattobeconsideredfortaxexemptionandalsoisthereanylimitassuch?. Intheabovescenarioamiexemptedfortaxforanamountof10.7lacks+((Rentreceived-M.Tax)-30%deductibleaspercalculations?). Asitisletouthopewealthtaxwillnotcomeintopicture. DearMadhav, Areyougoingtolet-outthesecondpropertytoo?Aretheybothinsamecityandlocation?Areyouemployedorself-employed?Ifemployed,isyourplaceofworksame? iamstayinginhousecoownedbymyparents.canIclaimHRAbypayingrenttothem? DearDhiwakar, Ifyouaretheco-owneroftheproperty,youcannotclaimHRAallowance. Hi, Myquestionisregardingtaximplicationsincaseof2houseproperties.Thescenarioisasfollows– Property1–IboughtaflatinOctober2012inPunewhosepossessionwillbegiveninAugust2015.Thepropertyisjointlyownedbymyselfandmywife.Ihavetakenahomeloanforthepropertyandmywifeisaco-applicantinthehomeloanaswell.Thebalanceloanamountisaround40lacs. Property2–IhaveboughtanotherflatinPuneinMay2015,whichisareadypossessionproperty.Thepropertyisjointlyownedbymyselfandmywife.Ihavetakenahomeloanforthepropertyandmywifeisaco-applicantinthehomeloanaswell.Theloanamountisaround60lacs. Iamimmediatelymovingintoproperty2inJune2015. Iwillberentingoutproperty1inSeptember2015assoonasthepossessionformalitiescomplete. Question1–CanIconsiderproperty1asSelfOccupiedandproperty2asDeemedLetOutasthiswillhelpmesavemaximumtaxexemption(Homeloanon2ndpropertyismorethanhomeloanonproperty1). Dear, IfyouaregoingtooccupyProperty-2,itbecomesyourself-occupiedproperty.Maybe,onceyougetthepossessionofperoperty-1,youcanoccupyit(ifpossible).Septemberisjustfewmonthsaway.. Duetomyofficelocation,Iamgoingtostayinproperty2andwillletoutproperty1inSeptember. Question–CanIconsiderproperty1asSelfOccupiedandproperty2asDeemedLetOutasthiswillhelpmesavemaximumtaxexemption(Homeloanon2ndpropertyismorethanhomeloanonproperty1). IowntwohousesinPune.Oneisoccupiedbymyparents(norent)&secondisrentedout.Loanforthehouseoccupiedbymyparentswasclosedlongago&loanfortheotherrentedhouseisongoing.IstayinMumbaiinarentedhouseasIworkinMumbai. CanIclaimfullinterestrebateonthehousewhichhasbeenrentedout?Duetolowrent,theincomefromhouseisfarbelowinterestpaid–Icouldsavesometax.CanIalsoclaimdeductionbasedontherentpaidbymeinMumbai. DearKiran, Yes,youcanclaimtotalinterestamountpaidonyour‘letout’property(Pune)astaxdeductionu/s24. YoucanclaimHRAallowance(ifany)too. Thanksforthereply.SomehowmyofficeaccountsseemtohaveanimpressionthatIcanclaimfullinterestdeductiononlyifbothmyhomeloansarerunning.NowIcanshowthemyourresponse&try&convincethem.Thanksagain.CanyoutellmeinwhichsectionofthetaxrulescanthisbefoundsothatIcanextractthat&showittothem? DearKiran, YoucanclaimyourHRAallowanceasyouareinMumbai(Section10–13A). YoucanclaimtaxdeductiononyourPuneproperty(Principalrepaymentundersection80c&Interestrepayment–fullamount–undersection24b) Ihavetwopropertiesinsamecityandtakentwohomeloans.onepropertyisdeclaredasselfoccupiedandanotherasletout. CaniavailHRAbenefitifistayinarentedhouseinthesamecity.isitallowed. Ifistayinarentedhouse,shouldideclarebothofmypropertiesasletouttoavailtaxbenefitorcanitbedeclaredoneasselfoccupiedandanotherasletoutasidid. DearBK, Willyoubeabletojustifyifatallthereisaninquiry,astowhyyouarenotresidinginoneofyourproperties.. Ipaidhomeloanemiinterestofrs.1,35,856/-andpre-emiinterestofrs.1,26,896/-canicliamboth?ifyes,pls.letmeknowthesectionsseperately. DearSrinivssan, Isthispropertyaself-occupiedoneora‘Let-out’property?Didyoutakethepossessionoftheproperty? MyColleaguehastakenahomeloan.Butheiseitherstayingthereorheisnotgettinganytenant.Sothereisnoincomefromthatproperty.Atthesametime,heisstayinginarentedhouse–wherehepaysrent. Canheclaimbothbenefitsof(Principalu/s80C)andInterestu/s24D also HRAExemptionasperrule/ kindlyadvice Regards SrinivasanRamesh DearSrinivssan, Areboththeproperties(own&rented)insamecity/town? DearSir, Me&mywifebothareworkinginITsectoratPuneandbotharein20%bracket.WeplantobuytworeadyflatsatPunecostingaround50and30lakhs.Thesewillbeourfirstpropertiesandwillbefinancedbyloan.Thesearelocatedinadjacentareas.Wewillbeoccupyingoneoftheflats.Pleaseguideasto • Howweshalltaketheloan/owntheproperties,jointlyorseparatelyforbothpropertiestominimizethetaxliability. • Willtheprincipalandinterestdeductionavailableforbothofus • Howwillbetaxtreatmentincaseofunoccupiedflat • WhatwillbethetaxtreatmentifweliveinourancestralhouseatBhosri,nearPuneandrentoutbothproperties DearBharat, Sinceyouareoptingforhomeloans,declaringtheancestralpropertyas‘self-occupied’onecouldbeverybeneficial.DonotethatyoumaynotbeabletoclaimHRAbenefits. Ifyoudeclareboththepropertiesas“Let-out”ones,youcanclaimtheentire‘interestamount’thatispayableonboththeloansastaxdeduction,undersection24. Suggestyoutogoforjoint-homeloans.Yes,taxdeductionsareavailableforbothofyou,intheproportionoftheloanstaken.But,fewquestions–Whatifyourspouseisunabletocontinueworking?CanyoubeabletofundtheEMIswithyourownincome? Re-checkifyouareoverleveragingyourself?Areyouallocatinganysavingstowardsyourretirementgoal?(Retirementgoalshouldbeyourtopmostpriority) HiSreekant, Thisisveryniceandusefularticle. Ihavefollowingquery. 2Yearsback,.IboughtonehouseinNoida,andiwillbegettingpossessionforsameinsomewherebetweenDec,15-Feb’16.IamfirstapplicantandmymotherisjointapplicantinHomeaswellhasHomeLoan. ExpectedInterestAmounttobepaidforthisHomeinFY-2015-16isaround1.50Lac.ForthewholeFY2015-16,thishomewillremainunoccupied. IalsoboughtoneflatinNaviMumbaiandigotpossessioninFirstweekofApril’15.MydadisFirstapplicantandmyselfSecondapplicantinHomeaswellasHomeLoan.ExpectedInterestAmounttobepaidforthisHomeinFY-2015-16isaround4.50Lac.Myselfalongwithmyparentswillbelivinginthisflat. ButaftersometimeimplanningtomoveouttoliveonRentinMumbaiCityasmyofficeisfarawayfromNaviMumbai Inthiscase,caniclaimallthreeirHRAandHLInterestonSelfOccupiedandHLInterestonLetOut? CanIselectMyNoida’sflatasSelfOccupiedandNaviMumbai’sflatasLetOutProperty(asInterestportionisHigherforMumbai’sflat) AlsohowcanicalculatenotionalIncomeforlet-outflat,whatproofdoineedtosubmitforthis. Thanksinadvance. DearShikhar, Basedontheinfoprovidedbyyou,youclaimallthree. Noidapropertycanbetreatedasself-occupied(assumingyourparentsresidethere).Mumbaipropertyas‘let-out’providedyouhavejustification(liketheone,mentionedbyyou). ThereisnoneedtosubmitanyproofstotheITdepartment.Youhavetogiverentreceiptstoyourtenantandalsoget‘rentalagreement’done.Keepacopyofallthebillsrelatedtomaintenanceofproperty/propertytaxreceiptsetc., Hi, IboughtaflatonloanatHyderabadandmyparentsarestayinginthatflat.IamstayinginPune.caniclaimtheinterestipayaslossfromhousepropertysothatiwillgetexemptionmorethan2lakhs.Pleaseletmeknowyourthoughts. Regards, Teja DearTeja, IfyourparentsareresidingatHyd,thenthepropertyhastobeconsideredasaSelf-occupiedpropertyonly. Ifyourparentspayrenttoyou,thatpropertycanbeconsideredasLet-outproperty.Kindlynotethatyouneedtogiverent-receipts.Also,itisjustifiablyiftheyhavesomesourceofincometopaythisrent. Veryusefulinfo.. Ihaveonequestion. IownajointpropertyinHyderabadwheremymother(alsomybrother)arestayingwhoisoneofthejointownersofthatproperty.AmstayingwithmywifeinChennaiinrentedhouse.NowmyquestionisCanIclaimHRAforChennaibydeclaringselfoccupiedforHyderabad?asIdon’tgetanyrentforHyderabadhouse.(Note:Momisnotworkingandbrotherwon’tclaimanyHRAforthathouse).Ifyes,doIneedtosubmitanydocumentforthis.Isthereanyformatforthisdocument?Pleaseletmeknow. DearKanth, Yes,youmayclaimtheHydpropertyasself-occupiedone,asyourmotherisresidinginit.Thereisnodeclarationassuch. YoucanclaimHRA. Iowntwoflatsoneinhometownwhichislet-outandoneincurrentworklocationwhichisselfoccupied.Bothhavehomeloansrunningbuttheoneathometownhassmallerloanandearningsmallerrentamountwhereasthesecondone(atworklocation)hashigherloanandhigherrentalpotentialbutisselfoccupied.Tax-wiseitwouldbegreatifIcoulddeclarethereverse,butisitacceptabletothegovt?IthinkitwouldbeweirdtoshowthatIamlivinginhometownbutworkinghere.Butifallowed,whatdoIhavetoshowtosubstantiateit?AndcanIthenshowHRAseparatelyheresinceIamdeemednotlivinghereinmyownhouse?HowcanIbenefitthemostinthissituation? DearUday, Areyourparentsresidinginyourhome-town?Ifyes,theycanstayinyourhometownhouseandyoucandeclareitasaSelf-occupiedhouse. Todeclarethecurrentlyoccupiedhouseas‘let-out’,youneedtohavevalidreasonsliketheworklocationandpropertylocationisveryfar..thenyoucan‘let-out’theproperty(remember,ifneedarises,youneedtojustifyyourdeclaration). DearSreekanth, Thankyouforsharingtheknowledgeyouhaveacquiredanddoingthisservice. Ihaveaqueryonsec24. Letussayapersonisstayinginself-occupiedpropertyandintendstobuyanotherhouseinthesamecity,thendoesitmakesensetobuythenewhouseasajointpropertyorindividualproperty? Myunderstandingisthatthenewpropertymustbedeemedas“let-out”andtherentearnedmustbedeclaredasincome.Secondly,thereisnoupperlimitonthequantumoftaxdeductedsothereisnobenefitingoingforajointproperty. Eagerlywaitingforyourresponse Regards, Balaji Togeneralizethequestion. Isthereanyadvantageingoingforajointloanfora2ndhouseinthesamecity? DearBalaji, Istheco-borroweranearningpersonandataxassessee? Yes,co-borrowerisanearningpersonandataxassesseeat30%taxrate DearBalaji, Thentheco-borroweralsocanclaimthe‘interestportion’underSection24right?(ofcourse,inproportiontohis/hershareintheproperty). Thanksforthereply. Mythinkingwasthattherentgeneratedfrom2ndhouseiscompletelytaxableandhencethereisnoupperlimitonthebenefitfromSec24(i.e.,2lakhsforindividualor4lakhsforjointloan).Henceididnotseeanyadvantageingoingforajointloan. Pls.correctme,ifiamwrong. DearBalaji, Theentireinterestamountpaidtowardshomeloancanbeclaimed.Ithinkyouaremisunderstandingthe‘upperlimit’concepthere. HiSreekanth, IhaveahomewhichihavetakeninyearMay,2011. Ihavebeenpayinginterestonthisloanasbelow: FY2011–2012:InterestINR:1,95,000 FY2012–2013:InterestINR:1,82,000 FY2013–2014:InterestINR:1,71,000 FY2014–2015:InterestINR:1,65,000 Now,fortheFY2014-2015,ihaveclaimedwholeinterestofINR1.65,000fortaxexemptionforinterestonhousingloan(ashousingloanexemptionlimitisraisedtoINR2,00,000).So,icanstillclaimtaxbenefitofINR35,000(2,00,000–1,65,000)towardstaxrebateforhousingloaninterestforFY2014-2015 Butforotherfinancialyears,iwasclaimingonlyINR1,50,000towardstaxexemptionforhusingloaninterest. CaniclaimtheleftoverinterestforFY(2011-2012,2012-2013,2013-2014)intheFY2014-2014i.e. INR45,000fromFY2011-2012,INR32,000fromFY2012-2013,INR21,0002013-2014 Thanks,Anurag DearAnurag, Youcannotclaimtheleftoverinterestamounts. Whendidyoutakethepossessionofyourproperty? DearSreekant, Lovedyourblog.Iamlookingforanansweronfollowingqueries. CASE IownapropertyinLucknowwheremyparentsstayandaftermytransfertoanewlocationIhaveboughtanewhouseatPune. ThereisnoloanontheLucknowpropertybutthereisaloanwhichIwilltakeforPuneproperty.Ihaveachoiceofdecidingtheloanamount.IfIgofor60Lacloantheyearlyinterestisabout5Lacsperannum(whichishigherthanthe2Laclimit)InanothercaseifIgofor40Lacloantheinterestcomponentisabout3Lacsperannum(whichisnearertothe2Lacamount). Idonotneedtoclaimanybenefitin80CfromhousepropertyasIamfullycoveredfromothersavings. Ihavefollowingquestions a)Whichisthemostbeneficialcasefinancially–DeclaringlucknowpropertyasselfoccupiedandPunepropertyasDeemedLetoutPropertyorviceversa. b)Isitnecessarytodeclareincomefromhousepropertyinincometaxreturneventoclaimthestandardbenefitof2Lacp.a.benefitoninterestexemption. c)Iftheanswertob)isNOIsitbeneficialtotakethe2Lacperannumlimitorisitbeneficialtomaximizeloanandtakebenefitoflossfromhouseproperty. Thanksinadvance. Regards DearSharad, Areyouasalariedperson?AreyouclaiminganyHRA? YesIamsalariedandasIamcurrentlyatPuneIamclainingbenefitunderHRA. ToaddIamclaimingHRAasIamcurrentlyinrentedapartment.IwillmovetothenewhouseInJun15 DearSharad, YourLucknowpropertyisoccupiedbyyourparents,itcanbetreatedasself-occupiedproperty. ThePropertyatPunecanbedeclaredas‘letout’oneprovidedthatyouhavegoodandvalidreasonsforstayinginarentedproperty(inpune).Ifyoudonotoptforthis,suggestyoutogoforRs40Lakhloan(iftaxationaloneisyourpriority).Incase,ifyoudeclarepunepropertyas“Self-occupied”,youmaycollectrentfromyourparents(iftheyhavesourceofincome)andtreatLucknowpropertyas‘let-out’one. Yes,toclaimthestandardbenefit,youneedtoshowtheincome/lossfrompropertyinITR. Hi, IliveinMumbaiandstayinarentedplaceandclaimHRA,IamplanningtobuyahomeinBangalorewheremyparentswouldbestaying.NowIwillcontinuetoclaimHRAinMumbaiandPrincipal/InterestforthehouseinBangalore.MyquestionissincetheinterestIpaywouldbemorethan6lakhs(muchmorethanthelimitforselfoccupiedproperty),woulditbeprudentandlegaltoletitouttomyparentsforanominalrent,suchthattheextrabenefitIgetfrom6lakhsinlet-outto2forSOPwouldoutweighthetaxIpayfortherentIreceivefrommyparents.Thanks DearDeepak, ItisoktoclaimHRAthoughyouhaveapropertyinMumbai,aslongasitisjustifiablethenitisok. Letmeknowifyourparentshaveanysourceofincome? iwasstayingpartoftheyearinselfhouse&partoftheyearinrentedhouseindifferentcity,somyquestionisforcalculationofHRAexemptionfullyearofsalarytobetakenintoconsiderationortherentedperiodofsalarytobetaken? DearPramod, Youhavetoconsiderthe‘rentedperiod’forHRApurpose. Thankyousomuch.Veryinformativeblog.Mysituationisbitdifferentfromalltheabovecases.WeliveinHyderabadiarentedhouse,andwe(meandmyhusbandjointly)ownahouseinBangalorewhichisletout.NowweareclaimingtaxbenefitforthatandHRAalso.Tillthispointeverythingisclear.ButnowwearepurchasingonemorehouseinMysoreandtakingsecondhouseloan.Bothhousesweownwillbeletout.Somyquestionis *Isitmandatorytodeclareatleastonehouseasselfoccupiedeventhoughwedon’tlivethere? *AsbothareletoutpropertiescanweclaimtotaltaxexemptionforinterestpaidonboththehousesalongwithHRA? DearArpana, Thankyouforyourappreciation. 1-Itisnotmandatory(butthereasonshouldbejustifiableasinyourcase) 2–Yes,youcanclaimtotalhomeloan(s)interestamount Keepvisitinganddosharethearticleswithyourfriends.Cheers! Fantasticwebsiteforlotofinformation.Butistillhaveadoubt,pleaseresolve. Iliveinahouseboughtbymyfatherbutmynameaddedasco-owner. Nowifabuyaflatwithmyincomehowisthisflattreated…selfoccupiedorletout? DearRahul, Thankyou! Sinceyournameisaddedasaco-ownertothetitledeed,thehouseyouarelivingnowistreatedasaSelf-occupiedone. Ifyoubuyaflatandrentitoutthenitistreatedas“Let-out”property. Thankyouforsuchapromptreply. Istillhaveadoubt.. 1.Myparentsstaysinthehousewithus,forhimthisisSelfOccupiedhouse(hehisfirstowner) 2.Myearningspouseco-ownstheFLATandthe50%loanrepaymenttoo…willthatbeSelfoccupiedforwife? Ihavecheckedmanywebsites…nowhereicouldfindtheclearsolutionforthiscase. Thanksforaddressingitpartiallyforme.Itwouldbeniceifyoucouldansthesetwotoo. WithRegards Rahul DearRahul, Theownershipofthepropertyisthemaincriteriahere. 1-Youaretheco-owneroftheproperty(theoneyouhaveoccupied),soitisaself-occupiedhouse. 2–Letmeknowiftheself-occupiedpropertyandyourFlatareinsamelocation(place/city)? (Yourqueryisreallyaninterestingone!) Yestheyareinsamecity…nearby.. FirstHome(presentlystayingin)isboughtbyfather…heputmynameasco-owner…westaytogether. Secondflat…iboughtjointlywithspouse..weshareloan50%each. Nowiamconfused… okformetheflatissecondhouse..whataboutmyspouse? Thankyouforsuchapromptreply. Istillhaveadoubt.. 1.Myparentsstaysinthehousewithus,forhimthisisSelfOccupiedhouse(hehisfirstowner) 2.Myearningspouseco-ownstheFLATandthe50%loanrepaymenttoo…willthatbeSelfoccupiedforwife? Ihavecheckedmanywebsites…nowhereicouldfindtheclearsolutionforthiscase. Thanksforaddressingitpartiallyforme.Itwouldbeniceifyoucouldansthesetwotoo. WithRegards Rahul DearRahul, IbelieveyourspousecanalsoconsidertheFlatas‘Secondhouse’(or)Let-outproperty. ThankyouSreekanth.Iwillapproachyouseparatelyfor furtherplanning. WithRegards Rahul DearRahul, Youarewelcome.Keepvisiting! HiSreekanth,Iamstayinginarentedpropertyandownapropertyinthesametown.ThepropertythatiowniscurrentlynotonrentasihavereceivedpossessioninSeptember2014only.Pleaseletmeknowiftheceilinglimitwillbe2laksorwilltherebenoceilinglimitforhomeloaninterestexemption. DearAmit, Ifyouarestayinginrentedhouse(in-spiteofowningapropertyinsametown),theselfoccupiedpropertywillbetreatedasa“Let-out”property.But,thereasonforyoustayinginarentedaccommodationshouldbereasonableandjustifiable. Eveniftheownpropertyisvacant,itistreatedasa‘letout’one. Forlet-outpropertiesthereisnoceilinglimitwrthomeloaninteresttaxexemption. HiSreekanth, Thearticleisinformative. Couldyoupleaseclarifyinthefollowingcase? Ihaveaboughtanhouseinmyhometown(otherthanwhereIcurrentlyreside)andIhaveletouttheproperty. Iamstayinginadifferenttownandstayinginarentedhouse(doesn’townapropertyinthistown) ThehouseinmyhometownistreatedasSOPorDLOP?(AddingadefinitionofDLOPmayhelp) WhataretheexemptionsforPrincipalandInterest? DearKiran, Thankyou. Thehouseinyourhometownisconsideredas‘Let-out’property. Principal–underSection80c:UptomaxRs1.5Lakh InterestAmount–underSection24:Noceilinglimitasyourpropertyisalet-outone. PrimarySidebarSearchthisWebsite…. 24000+Followers…ConnectNOW! 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